ProtoDAO - PIP05 - Base Multipliers Massive Changes

Proposal – Massive Base Multipliers changes.

In order to improve the profitability of the protocol the ProtoFi team spent the last days focused on numbers, simulations and case scenarios.

With the arrival of Solidly, the DEXs profitability changed a lot for some pairs, above all stables pairs.

Because of the low (0.001%) swap fees for stable pairs on Solidly almost all the stable swaps goes through their DEX and this left our stable pools not worthy to be incentivized like this anymore.

The calculations suggest that, the best thing to do, given the current situation, is to migrate the majority of the incentives towards non-stable farms.

Methodology we used:

1. Sorted the pairs by swap fees generated

2. decreased, almost to zero, those farming LPs that were generating less than 60usd per day in swap fees

3. Sorted the pairs by PnL = Current $ Emission for a given pool – $ Swap fees generated by that pool

4. Did not consider the native pairs (and particle) in this calculation

5. Redistributed the emissions by utilizing an optimization function where the goal was to minimize the PnL given a certain Ratio (where “ratio” is SwapFees/current $ emission)

6. Sorted the farming pools by TVL/annualized fees ratio (tell you what’s the fees generated in 1 year by standardizing the daily fees)

7. re-optimized the multipliers by migrating them from low TVL/ann fees pools to High ones.

8. Observed the expected APRs after those adjustments

9. manually re-optimized the multipliers (considering the other APRs for a given Pair in the Fantom Ecosystem)

10. Estimated the TVL outflow after this optimization

11. Repeated Step 9) using a 10) constraints with the aim of minimizing that outflow (in the short term)

Here below the simulations results:

PAIRS Base Multi Changes SOLID / FTM 0 SPIRIT / FTM -0.75 USDC / FTM 6 USDT / FTM 4 DAI / FTM 4 MIM / FTM 3 FRAX / FTM 3 SPELL / MIM -0.1 ETH / USDC 2 BTC / USDC 2 ETH / FTM 2.5 BTC / FTM -0.87 TSHARE / FTM -2.5 BOO / FTM -1.5 TOMB / FTM -4 CRV / FTM -3 MAI / USDC -1 MAI / DAI -1 USDT / USDC -1.37 FRAX / USDC -1.5 MIM / USDC -2.1 BTC / ETH -1.1 LQDR / FTM -0.75 DAI / USDC -1.92 MIM / DAI -1.22 USDT / DAI -1 MAI / USDT -1.05