Proposal to Allocate New Batcher Fees to Boost $MIN Staking Rewards

Temp Check Discussion
1

Introduction:

This proposal suggests redirecting ADA batcher fees revenue to boost $MIN staking rewards and make $MIN staking more attractive.

Problem Statement:

Currently, batcher fees accumulated are mostly unused in the DAO Treasury. Around 1.5mn ADA was accumulated since the start, and 300k was spent on CEX Listings and bootstrapping an USDM/ADA Pool. Moreover, the Minswap DAO Treasury currently owns more than 21mn ADA worth of assets. Instead of continuing to accumulate ADA, it’s better to use it to grow the protocol and adoption.

One of the best ways to achieve that is to increase MIN staking attractiveness. We propose allocating the new income from this source (historically an average of 100,000 ADA per month) to staking rewards. This would provide approximately 3,333 ADA in additional daily rewards, increasing staking ADA returns by around 57%, effectively increasing staking rewards a further 7.2%. With current data this would bring the APR to 20.5%. Note that is the average for the last 14 months, if we took only the last 3 months it would be 46,000 ADA, so a little less than half that increase.

Data derived with current rewards on 1-11-24

Proposed Solution:

  1. Redirect New Batcher Fees: Direct incoming batcher fees to increase ADA rewards for $MIN stakers. This additional ADA monthly boost will increase overall rewards significantly.
  2. Periodic Assessment: Regularly review staking engagement metrics to determine if the boost is achieving the intended impact and decide whether to extend, modify, or conclude the measure.

Benefits:

  • Enhanced Staking Appeal: The temporary increase in rewards makes staking more attractive, encouraging more users to participate and stake their $MIN.
  • Productive Use of Accumulated Fees: Directing batcher fees towards staking rewards offers an immediate and valuable benefit to the community rather than allowing these funds to remain idle. It’s a core business principle that unused funds should be actively utilized. If the DAO faces challenges in deploying these funds effectively, it would be better to return them to the stakers, allowing them to decide on their most efficient use.
  • Increased Community Engagement: Higher staking rewards may encourage long-term holders to continue participating in the Minswap ecosystem.

Proposed Compensation:

To fairly recognize the time and effort spent in researching, analyzing, and drafting this proposal, we propose a compensation of 120$ in MIN Tokens for the 3 hours dedicated to its development to the author (calles), following the average hourly rate corresponding to the position of a financial analyst, taken from the data aggregators of Glassdoor and Salary.com. The average hourly rate for an intermediate analyst is 40$.

11 Likes
2

I like it!

As long as we keep some funds flowing to the treasury for future development projects I am happy

3 Likes
3

I’m against cutting the last source of reliable revenue for the DAO without providing an alternative source of revenue. I hope this makes sense.

Nonetheless, good job with the proposal and thank you for your involvement and initiative.

4 Likes
4

Great proposal.It will help to increase MIN utility and value, increasing the DEXs appeal for lps.
It will also reward stakers who are the long term supporters of the protocol.
It can be implemented in a very short time, with almost immediate results to see it s effectiveness
It starts managing in some way DAOs funds instead of living them forgotten in a wallet
It can be stopped if some other proposal finds a better destination for the funds
It can be stopped if the impact in MIN valuation is not significant

Minswap needs to make a move and this one may help us to increase MIN valuation&attract some liquidity

2 Likes
5

Great Proposal. MIN is one of the best tools we have for growing the Protocol and adoption. It’s used for incentivising liquidity, but also labour. Making Staking MIN more attractive should be a priority for the protocol.

The DAO Treasury is incredibly well funded right now. The priority should not be to keep growing, but rather to more efficiently manage that capital, and also utilize it other Growth initiatives such as CEX Listings.

2 Likes
6

One can’t perform larger scale operations without a DAO revenue to replenish said Treasury.

I’m sorry for the laziness, but I’ve expressed myself on Discord and it’s too much to rewrite everything

Nonetheless, it is disingenuous to claim that increasing Staking APR without actually working on the underlying issue (which is marginal emissions vs revenue) will cause MIN to suddenly become a more attractive to invest in.

Lastly, again, I would favour this proposal if an alternative source of DAO revenue is included.

1 Like
7

" Instead of continuing to accumulate ADA, it’s better to use it to grow the protocol and adoption.

One of the best ways to achieve that is to increase MIN staking attractiveness."

This has to be demonstrated - not merely asserted.

Min staking currently functions as an equity of the protocol trading fees. A very reasonable correlation since it depends on volume i.e. liquidity exchanged between makers and takers, with a percentage of trading fees being arrogated to the value of the min token - which is rewards to market makers of significant farms to help hedge them from impermanent loss.

Batcher fees are a result of individual trades - regardless of volume. They are indicative of user activity and so are more commensurate with general adoption and not meant to be given as an offset to liquidity providers - whose risk is more dependent on volume and price action.

Now obviously there is some relationship between the two but for the sake of clarity these two things need to be kept distinct. Batcher fees are static and dependent on protocol usage and so should be reserved for growing the adoption of the protocol. Meanwhile trading fees are appropriated to the Min staking mechanism and is reserved for earners of the Min token i.e. liquidity providers who take on a more substantial amount of risk.

Reappropriating batcher fees to Min staking will improve the demand schedule for Min and reduce the defecit in the value of the marginal supply. However, it robs the DAO of its treasury revenue. Unless there is an alternative source of revenue the OP can identify to replace batcher fees, I cannot begin to support this proposal.

As to why the DAO should have a treasury at all that is a good question, worthy of another conversation. But assuming we all agree that the DAO should have a treasury with a reliable and predictable revenue source predicated on the existence of the protocol itself i.e. capitalizing on present usage to engender future adoption through various schemes outside the scope of this reply, I cannot support this proposal as it stands. In fact, the proposal presents to me as self-defeating of the very problem - solution dialectic it sets up.

As a counter proposal I think we should disseminate the LBE LP Tokens to stakers who fulfill their 9 months course. This will provide a source of value to market makers whose trade is, well, market making. Rather than outsourcing the portfolio to a third party at some extraneous cost.

There is also plenty to be done about the emissions schedule and its over allocation to the Min-Ada pool. But that is an ongoing discussion.

Hope this reads well.

1 Like
8

Who does the “periodic assessment”? What authority does this person have to make changes to the plan?

Or is this simply saying that “we” (the DAO) need to do the assessment and make another proposal if there is an issue?

9

The DAO should be relentlessly focused on GROWING the DEX. If we can’t come up with ideas for how to spend revenue to GROW then the prospects for the future are not good. This revenue source shpuld go to things like building up liquidity in pools like stablecoins that are dominated currently by competitors. The price of MIN only goes to zero if Minswap dies.

1 Like
10

image

The graph provide where inaction in managing the funds are leading the protocol.
This proposal aims to increase the appeal of MIN its value and by derivation the appeal to provide liquidity in the dex.
The inaction is much worst than the proposal. this do nothing attitude is killing me!
one of the goods of this proposal is that it can be stopped whenever some smarter mind finds a better/easier way of using the funds.
Possibilities there are a lot, but all of them are not easy to handle and get approved:
-Monthly Destinate part of the funds to boost farming rewards of most traded tokens accompanied with governance votes to approve them. But somebody will tell why paying more LPs, they are already well paid…
-Replace part of the emissions in MIN with ADA from batcher fees. Somebody will say they don’t ike it neither because the DAO is losing their funds…
-Increase DAO LP in most traded tokens. Somebody will say that it s a bad investment
-Start a buyback program of MIN with daos funds. Somebody will say that the dao has tons of min and why should it have some more
-and more ideas
-and more ideas
-and more ideas
BUt all of them harder, longer to implement and as far as I know there is no proposal rounding…
What s incredible is that almost nobody said anything when the dao decided to spend 300K of daos funds in a some CEX. That was really a loss of money and almost nobody was concerned about givien away daos funds.
My opinion is that this proposal should go online. If approved it wil incentivise all the people that think that there are better options to work on a proposal. If this proposal is better for the protocol for suremajority of min holders will approve it.
Of course this is just the opinion of another dude. But it is as legitimate than the ones of people that just have a wait an see attitude.
Long life Minswap

11

This is gross misrepresentation of what is happening/has happened.

Most DEXs have experienced a pig pull of stablecoin liquidity. Sundaeswap used to have 20M TVL in ADA/USDM it’s down to 3M in the ADA/USM pool.

I mean… this proposal is not addressing the management of DAO Treasury, the inaction would still be the same even if this proposal passed!

Why is the main complaint “DAO treasury funds need to undergo efficient capital management”, but the response is “let’s stop growing DAO Treasury altogether”? It’s mindboggling.

Lastly, there has been no market study to support any claims. Decisions like these can’t be taken so lightly.

2 Likes
12

After extensive hours of discussion I can summarize the issue this way, trying to keep it simple.

People that don’t like the proposal mainly say it’s because of this not contributing to the long term growth of the protocol and that funds should be used in another way. Matter of fact is that as of today this is not the case, they are just sitting there doing nothing. So it’s not a real alternative.

Between the DAO keeping idle funds or sharing it to stakers I have a clear favorite. It makes more sense to share these funds with stakers than to let them sit unused. While finding long-term growth strategies is important, waiting indefinitely without action is not a productive approach. This proposal does not deploy current funds but rather future ones.

If a clear alternative arises that can drive sustainable growth, we can easily revisit and redirect these resources with another proposal. But until then, I believe that enhancing staking rewards offers a practical way to support and retain the community that powers Minswap.

At the end of the day I would say BOTH valid opinions and my feeling is that it’s this forum responsibility to get this to on chain voting so we can know if the DAO favors one option or the other given the current situation. It’s not our decisions, should be everyone’s.

2 Likes
13

Well put. This proposal goes to the heart of what we want the Min token to be. If we go the route that you propose then it is effectively becoming more of a non-voting share in an equity, since there will be nothing for the min community to decide regarding the treasury, because there will be none, eventually (assuming we ultimately spend the chest that has accumulated so far. I’m fine with that. We just need to decide what we want to be as a DAO, an institution or a loose anarcho-capitalist alliance or something in between?

1 Like
14

This proposal complains that DAO Treasury funds are inactive.

It then proceeds to remove it’s ONLY source of growth by redirecting the batcher fees elsewhere.

AND

Doesn’t propose ANYTHING to actively manage the DAO Treasury.

This proposal must NOT go on chain. If it does, it must be VOTED AGAINST.

PLEASE review this proposal to Create a DAO Advisory Council in order to be able to really move forward.

1 Like
15

Lets alow MIN holders decide

5 Likes
16

I don’t think there is misinterpretation. TVL is being steadly going down since a few months. This big dump may be caused by some USDM thing, but how do you explain tvl going down with an ecosystema growing?

17

Cool proposal as I said before, and the main point I feel is relevant to this proposal:

“However, the DAO Council in any way or form should not override or reduce the rights of MIN holders to vote, submit proposals, engage in governance discussions, or determine their level of participation in shaping the future of Minswap.”

3 Likes