I noticed that other DEXs such as PancakeSwap have been occasionally offering yield farming rewards of 300% or greater on certain pairs (i.e. TEM-BUSD yield of 331.99% on or around March 22, 2022).
Whilst the rewards on Minswap have been attractive, extending the LBE NFT Yield Boost to a full year would help to retain long term yield farmers at Minswap - effectively benefiting both Minswap and yield farming investors.
In exchange for receiving the LBE NFT Yield Boost, yield farming investors could agree to varying lockup periods for different % reward levels.
For example +70% Yield Boost for 3 month period, +150% Yield Boost for 6 month period, and +220% Yield Boost for 12 month period.
While a great idea, I think the more attractive long-term solution may be to firmly establish real utilities for the Min token. If the token is worth holding on to and provides real utility, then you’ll hold on to strong supporters who provide liquidity, without the need for mercenary liquidity.
At the end of the day, money will flow to the highest yields and the utility of MIN vs. other DEX coins would be equilateral in even a best case scenario.
Is there conceivably any utility to the MIN coin that could not be duplicated by other DEXs that would remain unique to MIN exclusively and perpetually?
If not, then if PancakeSwap is offering 300% yields on certain pairs whilst Minswap is only offering 160% yields, half the contest has already been won.
Offering high returns on yield farming is not just a short term solution, but a long term solution, for any DEX worth its weight in gold.
Disagree with extending LBE NFT boost for longer. This gives an advantage to a very small minority of total Minswap users. The utility of the boost was to promote early adoption and to facilitate the bootstrap. The goals going forward should be to provide real utility to the MIN token to incentivize holding it, rather than pure speculation.
Personally, I am not a fan of lockup periods. If you even give it as an option to people with an incentive over non-locking options, then it can invalidate non-lockup strategies. This would prompt individuals looking for a non-lockup solution to seek competing services. The non-locking nature of Minswap is currently an attractive feature that sets it apart from other DEXs.
Regarding the 300% yields mentioned. I don’t know anything about TEM coin, but providing liquidity to smaller coins with less utility (and thus owning it) with 300% yield isn’t necessarily more valuable than owning a more promising coin with lower yield. In my experience, those 300-1000% YF coins get pumped and dumped and you end up loosing more money than you gain on high YF rewards. Holding MIN on the other hand is a pretty safe bet IMO.
yeah it seems like it would be reinforcing a small group of early adopters. I participated in the LBE, but early adoption period is over.
It was great to be involved early and I like the overall experience of getting an NFT that provided some value. Maybe the same approach could be used in the future when new farming pools are initiated. That way the coolness can be shared by the whole community, instead of the cadre of early adopters.
Yes, perhaps eliminating the need for having the LBE NFT to boost yields could be the right strategy. The lockup period should only be applicable for investors who opt in for the yield boost.
In my view, increasing yields and the utility of MIN could go hand in hand and aren’t mutually exclusive.
After my experience with other Cardano DEXs such as SUNDAE, I am convinced volatility in asset prices and even a gradual decline in yield farming rewards % can lead to outsized impermanent losses and these risks can potentially be offset on Minswap if the yield farming rewards were higher.
If yield rewards on Minswap go down by even 20% from current levels, this could wreak a lot of havoc on yield farming, so I sure hope yields do not decline on Minswap.
I also participated LBE, but I disagree.
In fact, I don’t like to call it as booster, since it is not really booster. It does not increase overall rewards, but it just change distribution of rewards. If some get high rewards due to the booster, it means that others get a lot low rewards since total rewards are fixed.
Extending booster would only benefit some of LBE participants. It is bad (not indifferent) for not only LBE-nonparticipants but also some LBE participants who had unlucky draws.
Overall, It will adversely affect the participation of new people, which would be bad for minswap and us.
I’m surprised no one commented on how the yield farming APR rewards fell by over 100% on certain pairs - such as ADA-AADA, ADA-VYFI, etc. - in just a short week.
Regardless of how it is implemented, a yield boost is necessary.
I’m quite sure many yield farming positions on Minswap have now become unprofitable over the short term.
I think giving min utility is the way forward. This could be in the form of reduced laminar fees, governance and also extra perks, such as extra boosts on its anniversary every year etc.
Minswap lost more than $63.6 million in Total Locked Value in less than a week according to DeFi Llama data.
This could be attributed to the steep declines in yield farming APR rewards, which could be the single most important utility there is to get right in the DeFi game.
Whether the yield farming boost is implemented as a broad measure or only through the LBE NFT is not as pressing a concern as the fact that a yield farming APR boost is obviously necessary right now.
A boost in yield farming APR rewards will not only help put a floor on the underlying asset price of MIN, but will also indirectly grow the Minswap ecosystem by attracting long term yield investors.
A suite of consistently high yield farming options - rather than APR yields that change with the weather - will ensure that investors stay the course.
Offer the highest yields to investors who wish to have a lockup option and high enough yields to investors who wish to have the flexibility to withdraw liquidity at any given moment. But current yields are much too low for the risk involved and over the past two days, current yields have become unprofitable.
If these conditions continue, Total Locked Value could very well decline even further.