Liquidity mining round 3 incentive plan proposal (Ethereum network)

Dear community members:

The 2nd round of QUSD mining opened four mining pools simultaneously. Choosing four mining pools to open at the same time was originally to open the corresponding gateway for QUSD to exchange other stable currencies in addition to KUN/QUSD transaction, and truly activate the ecology of QUSD. However, after the liquidity pool was opened, the effects were not satisfactory, including:

  • QUSD's assets in the bStable trading pool are unbalanced, and too much QUSD has entered the stablecoin liquidity pool. On the one hand, it leads to the discount of QUSD compare to other stablecoins in pool. On the other hand, it also opens a channel for mining and dumping of KUN. As a result, the price of KUN drops, QUSD was exchanged into other stablecoins in large amount, which did not effectively activate the normal use of QUSD.

  • In the liquidity mining of the BSC network last week, due to the lack of imbalance protection mechanism in bStable, and the lack of warnings on their UI, and the imbalance of the stablecoin trading pool after excessive QUSD replenishment, arbitrageurs took excess QUSD from the trading pool, causing some users to suffer a loss of their QUSD capital. After the event was fermented, it caused a blow to user confidence and QUSD issuance, and had a negative impact on the project. This accident is partly due to the partial centralization of QIAN's early decision-making process and insufficient community discussion. If the energy of community members is fully mobilized to investigate bStable products before bStable pool is launched, it is believed that the possibility of accidents can be greatly reduced. This also reminds us that in the operation of QIAN, we must rely on and give the community full authority in order to bring long-term benefits to QIAN.

  • The delay of governance voting, resulting in the 3rd round of liquidity mining not immediately following the end of 2nd round, which caused the withdrawal of part of the QUSD market-making funds, which affected the amount of QUSD minting.

Summarizing the various lessons learned of the project operation, the QIAN community initiator David suggested here that the third round of the Ethereum network liquidity mining incentive plan is as follows:

  • The liquidity incentive of the trading pool. Due to the parameters of smart contract, the release rate of KUN tokens is a 30-day uniform release and cannot be stopped or modified midway. Therefore, in the third round of Ethereum mining, The release rate of 3,333.33 KUNs per day will remain unchanged;

  • Liquidity incentives of the Balancer trading pool, due to the faster release of KUN in the previous round (22,800 KUN/day), resulting in more selling, some community members proposed to reduce the KUN release of the Balancer trading pool speed ​​in order to appropriately stabilize the KUN price, and at the same time reduce the profitability of speculative funds, and provide higher market-making income for loyal market-making funds. Therefore, the proposal will be submitted to the community for discussion. There are currently three sets of plans, and community members need to discuss and vote on which set of plans to adopt, or create new plans:

  1. Reward: 3,888 KUN/day (82.9% reduction in production), duration: 14 days

  2. Reward: 11,388 KUN/day (50% reduction in production), duration: 14 days

  3. Reward: 18,000 KUN/day (21.1% reduction in production), duration: 14 days

  • Increase QUSD and KUN trading pairs on Uniswap, and provide appropriate liquidity incentives:
  1. Add ETH/QUSD, BTCB/QUSD, CRV/QUSD, UNI/QUSD, AAVE/QUSD, LINK/QUSD, FOR/QUSD trading pairs, and the LP tokens can be locked to mining Mining contracts for KUN mining. Reward: The LP token lock-up reward for each trading pair is 100 KUN/day for 14 days.

  2. Add YFI/QUSD YFII/QUSD trading pair. Reward: 150 KUN/day for 14 days.

  3. Add KUN/ETH trading pair. Reward: 100 KUN/day for 14 days.

At the same time, enthusiastic members such as David Lei, Jeffery Chu, Cao Yin, Lin, Wayne, Colin, and Ming are actively expanding the usage scenarios of QUSD. Currently, they are communicating with Curve’s QUSD trading pool, Loopring DEX’s QUSD trading pair, DODO DEX’s QUSD trading pair, SakeSwap's QUSD trading pair and so on. On behalf of the QIAN community, David Lei appealed and welcomed more enthusiastic members to make efforts to expand the use of QUSD. Let us work together to build QIAN into an excellent DeFi infrastructure!

Finally, all community members are invited to discuss the third round of liquidity mining parameter proposals mentioned above. If there are no obvious objections or amendments in the comments on this post, David will initiate a vote for the proposal after 24 hours. The voting lasts for 24 hours. The execution will trigger immediately after voting end.

1 Like

My suggestion for incentives:

First, I believe that the project is still very new and has to attract TVL more quickly, a "bootstrap". For that it is necessary to maintain the reward rate of KUN / day, I do not believe that reducing too much is beneficial at this time.

Second, the main point of the project is to make QUSD useful, and for it to be useful we need it to be available in several DEX and with a lot of liquidity. Nothing better for liquidity than matching QUSD with the native token of that chain In the case of Ethereum, ETH.
In other words, the suggestion is to concentrate on a few pools, but those that are effective, and those are rewarded. The big DEX like Uniswap , always route their order using preferably the native token.
Example: If you want to exchange QUSD for TUSD, Uniswap will route your order to QUSD> ETH> TUSD.

So my suggestion is to encourage stable pools (like and in other DEX only pools with the native token, that is, QUSD / ETH.

The same rule applies to KUN: KUN / ETH
Actrually I do not know if a KUN/QUSD is a good fit.

-Balancer pool: 11,388 Kun / day
-Uniswap: ETH / QUSD, ETH / KUN both with 11,388 / Kun / day

Another point, the incentives have to be directed in greater volume to those who are at greater risk, a ETH/KUN pool for example has a higher risk of IL than a Stable Pool type

Thank you very much for sharing the idea! That incentive us a lot, and I also add your ID into the latest voting as a contributor. Hope our community will grow better following you and other senior members' guidings!