Background & Motivation
Hello community. A few weeks ago we approved a proposal to boost farming rates 2x as a promotion around the USDC launch. This launch & promotion successfully grew TVL very significantly. We then had a vote to extend these higher rates.
Overall this was a very successful program, but we are now in a position where TVL has grown but TRU price is going down steadily as farmers sell their TRU. @tylerw is observing behavior of farmers on-chain and it does look like a significant fraction of the farmed TRU is being sold into the market.
We’ve been in this situation before (high farm emissions, weak TRU price), and the solution is to reduce farm emissions. This should lead to less TRU being sold and potentially a price increase. Depending on how price reacts to the lower farm emissions, actual APYs for farmers could stay the same or even go up. We’ll learn a lot from making this change, and worst case, if we don’t see good results, we can take a vote and reverse it.
If we don’t act, I expect we’ll continue to see a weak TRU price and our farms will be stuck in a painful place where they have to keep shooting out lots of cheap TRU rather than a smaller amount of expensive TRU.
We were in exactly this same position some months ago (high farm emissions, TRU price steadily decreasing), and once we took the logical step of reducing farming rates, we turned the situation around. This is the time to do exactly the same thing.
Hence my proposal to reduce all farm emissions by 30%. This is meant to be a significant but not overwhelming change that will give us valuable data on how we want to proceed going forward.
Reduce all farm emissions by 30%
- Update USDT pool TRU incentives from 200,000 TRU/day → 140,000 TRU/day
- Update TUSD pool incentives from 100,000 TRU/day → 70,000 TRU/day
- Update USDC pool incentives from 200,000 TRU/day → 140,000 TRU/day
- Update TRU Staking incentives from 125,000 TRU/day → 87,500 TRU/day
- Yes I agree with the proposal to reduce all farms by 30%
- No I don’t agree with the proposal