Moving a post from #ideas by @tylerw to an official proposal. - [Idea] Reduce incentives for tfTUSD/TUSD farm
Summary:
I propose that the Uniswap tfTUSD/TUSD LP farm emissions be reduced to 10% of the current emissions rate to 15,669 TRU/day, effective March 15, 2021 (two weeks from today).
Background:
When this farm was launched in Nov. 2020, its goal was to provide instant liquidity for users who wished to enter/exit the tfTUSD lending pool. tfTUSD liquidity has drastically improved via Liquid Exit and Uniswap liquidity since launch, and so we should revisit this farm.
How tfTUSD liquidity has improved over the past three months:
- Liquid Exit launched and now enables users to withdraw large amounts of tfTUSD for TUSD with minimal slippage. Liquid Exit has been used for >7M TUSD worth of withdrawals.
- The tfTUSD/TUSD Uniswap pool now holds ~$17M in TVL and is the 32nd largest Uniswap pool as of today. This pool enables users to get instant tfTUSD liquidity at lower gas costs, making it helpful for users who want to withdraw small amounts of tfTUSD.
Motivation:
Given the improvements above, I argue for reducing incentives to the tfTUSD/TUSD LP farm. I believe we can achieve instant liquidity for tfTUSD holders with much lower incentives in this farm. Lowering incentives for this farm seems to align with sentiment expressed in community discussions .
Specification:
TRU Rewards for the tfUSD/TUSD pool will be reduced from the current rate of 156,690 per day to 15,669 per day.