We are all getting used to a new world of Decentralized Finance. Providing liquidity in pairs brings value to the network. As @edicted has been saying 'Infinite Liquidity is the Key to Growth'. On HIVE we have a growing Decentralized Finance Platform built on hive-engine, using feeless diesel pools. In just a few days they will experiment with fees to add some rewards to them.
There are several pools of interest, but the most important pool for helping to stabilize the price of HBD is the SWAP.HBD:SWAP.BUSD pool. If there is interest, I (or anyone) can make a similar proposal for the Swap.Hive:Swap.HBD pool, if this is deemed desirable by the community.
We know that stabilizing the price of HBD is important to the network. Apart from the work done by the HBD Stabilizer Proposal, we also have the recent implementation of the HIVE to HBD conversion within Hard Fork 25.
Help keep HBD stable by incentivizing SWAP.HBD:SWAP.BUSD liquidity pair
Right now, witnesses are targetting 12% interest rate to the savings account, so we can use this number to easily calculate how much funding we want to provide to liquidity providers of this pool.
Do we want 1 million dollars in liquidity? By targeting 12%, we can offer $120,000 in liquidity rewards for a year.
Each day this comes out to 329 HBD per day. We can increase (or decrease) this at any time. Please leave your feedback in the comments and I will make the appropriate follow up proposals in the future.
329 HBD per day to liquidity providers on the SWAP.HBD:SWAP.BUSD pool.
There is currently quite a bit of unspent money in the DHF, which is not necessarily a bad thing. But through solid plans we can create much more value than we spend.
WHY BUSD?
BUSD is the Binance dollar stable token, it is run by Binance on their BSC Binance smart chain. Please check out this post by @edicted for a Binance clone alternative.
Binance and BSC is one of the top chains for Decentralized Finance experimentation, so much so that Splinterlands and LeoFinance are already there. SWAP.HBD:SWAP.BUSD is a bridge that is incredibly important to open us up to new users and expand the possible arbitrage routes into and through our ecosystem. We want people to be able to buy into our system as seemlessly as possible. If we want them to come, they need to be able to move in, and right now the HBD liquidity is terrible.
This is also a promising sink for HBD, we are incentivizing people to hold HBD stable tokens in a value adding LP position.
This proposal can be easily expanded in the future to target any level of liquidity we desire.
But I think its best to target $1 million USD first, as not to waste money getting started. It may take some time to attract the levels of liquidity we are dreaming about, but I could easily see $10 million + in that pool in the future.
How will it be distributed?
HBD will go to the @@@hbd.liquidity account, which will be distributed to the SWAP.HBD:SWAP.BUSD liquidity providers on a 1/30 basis, which means there will be a one month build-up time from the day this proposal gets funding. This will allow time for people to move their liquidity in response to the 30 day build up of total yield.
The distribution will be run by @gerber of the BeeSwap Team. He is one of the most well known devs involved in Hive-Engine and LeoFinance, as well as his own dApp - dCity.io. He runs similar distributions for BeeSwap, XCHAOS and dCity, he has the code already prepared to make this work.
I asked @gerber how much money we should set aside for his code, but @gerber is a true crypto gentleman, and all he said to me was:
When will this start?
Obviously we need to get enough votes, but as this is a topic that has gotten a lot of attention, and this solution has also been proposed by more than one, I am going to let the discussion continue for just 2 weeks more as HIVE stakers vote if this is something they want to see on our network.
The proposal will run for one year, and so if it takes longer than 15 days to get the votes it needs, it will eat into the year.
The year will thus be February 7th 2022 until February 6th 2023.
Cast your votes! Tell your Friends!
Its not every day in every way that we can actually participate in the solutions for creating the better future we want to see. I am happy doing my part talking to idealists and devs, and writing a post here and there.
But now its on you. Vote, or don't. The future will reflect the choices of the HIVE community.