QIP189: Create a Liquidity Mining Budget

The objective is to significantly enhance the efficiency of liquidity mining for MAI by more than 2x through voting incentives. QiDao's aim is to establish a budget for voting incentives on Solidly/Velodrome forks without raising QI's overall emissions.

All resources for this budget will be sourced from existing direct emissions that are not being optimally utilized currently.

In the past, QiDao utilized masterchefs to incentivize liquidity providers directly, but it now intends to employ voting incentives on Solidly/Velodrome forks. This new strategy of incentivizing liquidity is more effective than masterchefs, as the final rewards given to liquidity providers are considerably greater than the emissions from the incentivizing protocol.

To become a major player in DEXs, MAI requires a voting incentives budget for converting LPs into MAI pairs. QiDao is in a unique position since it is the most widely used decentralized stablecoin and often receives voting allocations from new Solidly/Velodrome forks.

Current efficiency of voting incentives vs direct emissions

Current voting incentives compared to direct emissions demonstrate a stark contrast. The Return on Incentive (ROI) for voting incentives is much higher compared to direct emissions.

Voting incentives

• Thena MAI-FRAX: 34x ROI
• Equilibre MAI-USDC: 118x ROI
• Velodrome (several pools): 2.58x to 8.32x
• Aura MAI-USDC: 1.28x

Direct emissions

• QuickSwap MAI-USDC: 1x ROI
• Curve MAI-3CRV: 1x ROI
• Curve MAI-USDC-USDT: 1x ROI

ROI = Return on Incentive. In other words, for every dollar of QI emissions, how many rewards LPers receive.

Terms

This budget will be voted at the end of every quarter to reevaluate performance. The budget does not need to be used completely. It should be adjusted for MAI’s market cap and peg.

Current QI emissions to MAI

TotaI: 271,750 / week

Masterchefs

• 120,000 / week on MAI-USDC QuickSwap
• 50,000 / week on MAI-USDT-USDC Curve
• 50,000 / week MAI-USDC Uniswap V3
• 10,000 / week on MAI-3CRV Curve

Bribes

• 15,000 / week on MAI-USDC Aura/Balancer
• 3,750 / week on MAI-LUSD Velodrome
• 3,000 / week on MAI-FRAX Thena Other
• 20,000 / week on MAI-gDAI KyberSwap

Proposed new allocations

Total: 271,750 / week

Masterchefs

• 50,000 / week on MAI-USDC Uniswap V3
• 25,000 / week on MAI-USDT-USDC Curve
• 10,000 / week on MAI-3CRV Curve

Bribes

• 166,750 / week budget for bribing and incentivizing across all chains (not necessarily to be used fully)

Other

• 20,000 / week on MAI-gDAI KyberSwap

Quorum Standards

The option with the most votes will be adopted.

Options

• Approve proposal
• Reject proposal
• Abstain