Sorry, ItzDanny, but I couldn’t disagree with you more this time. The best thing for the LQ token should be that LiqwidDAO respects the will of its holders as much as possible and this will of the LQ holders is expressed in the form of TVL on different DEXs. LQ holders are free to choose the DEX they prefer and the fact that they have different preferences does not merit strongly discriminatory treatment. Choosing a single DEX (Minswap) and forcing others to choose the same option may be better for Minswap, but not for the LQ token. I agree that there should be a minimum TVL threshold as a requirement, but the distribution between DEXs should be proportional to the TVL of LP ADA LQ because this also reflects other minority preferences that we should not neglect. A big hug friend ItzDanny!!
Voted NO, Over 70% of transactions on cardano is going through dex aggregaters now and there is no need to give incentives to a single dex, liquidty providers mostly will sell their rewards to cover ILs and this would put massive sell pressure on already declining lq price. Instead of giving away 420000 lq to other protocol users i believe we should use it to incentives the new tokens that will be added to Liqwid finance in near future.
Even if deep liquidty is absolutely necessary then using spectrum dex with 1% fee would benefit Liqwid more in my opinion. This is what dex hunter did few months ago by moving their Liquidity from minswap to spectrum dex and created a 1% fee pool.
Voted No.
“Decentralize” liquidity.
Afterall, most whales use aggregators for big swaps. Using only 1 dex is a huge single point of failure.
I’ve done numerous performance tests recently through aggregators. Test for yourselves too.
Average speed - Consistency: 1) Spectrum (within same block), 2) Wingriders - Sundaeswap (Next block), 3) Minswap (Some next block, some 2nd block). Vyfi & Muesli have been very inconsistent.
Minswap v2 allows us to have 1% pool fees.
The reason Minswap makes the most sense beyond the obvious fact they have majority of Cardano DEX liquidity and volume is the fact their token MIN has deep liquidity and generates strong cashflows. This means if the DAO treasury wants to stake MIN earned via Protocol Owned Liquidity (POL) it will earn most ADA yield in Minswap since they generate far higher revenues than any other DEX. This directly benefits Liqwid as it means our DAO treasury is compounding its total POL at a faster pace (since the ADA can be deposited back into the LQ/ADA pool alongside LQ yielded from POL or from the DAO treasury).
It’s hard to deny this point, even if you took away the glaring reality of Minswap DEX dominance, you can not ignore the fact that MIN generating more ADA real yield and having higher liquidity does not have a directly positive impact in enabling Liqwid DAO to compound our treasury’s POL at a faster rate due to them having the highest real yield and MIN having the most liquidity of any Cardano token. As a hypothetical: imagine Minswap had the least liquidity/volume compared to all other DEXs but somehow still had the same ADA real yield amount. One could argue in this scenario it would still be more beneficial for Liqwid DAO to utilize Minswap yield farming to maximize the growth rate of our POL rather than split DEX incentives across multiple. There is a massive opportunity cost to use another DEX given the real yield Minswap provides to its LPs today.
All the arguments I have seen so far don’t meaningfully address these points at all and are fairly minor:
-Minswap v2 suports dynamic fees same as Spectrum, there are talks in the community most Minswap v2 pools will have fees raised to 1% and maybe even higher for selling (e.g. 1% fee to buy, 2% fee to sell).
-Minswap has established themselves as the clear leaders in Cardano DeFi, until we see another team remotely test their dominance we should continue on this path, power laws and historical performance on Cardano says Minswap will continue to dominate and grow their market share.
-Fragmenting liquidity across multiple DEXs in the name of decentralization just to force users to go to a DEX aggregator for best price execution makes little sense to me when Minswap has already clearly established themselves as the dominant leader and their app/API infrastructure is buttery smooth for anyone to use with ease.
Don’t know if this will sound irrelevant to the conversation…
I agree with your point & stated facts, but should we take into consideration only the shiny days or be prepared somehow for any rainy ones too?
The question maybe should have been: Launch a Minswap triple farm or spead liquidity across 4 DEXes for example.
Give LQ holders the choise & also avoid any “marketing drama”…Never pick winners if you don’t have too 
- The approval of one decision or another does not depend on the will of the LQ holders but on the type of question that the Liqwid team asks itself when voting. If the Liqwid team wants all liquidity to be centralized on a single DEX, they know exactly what kind of question to ask (write “yes 100% Minswap or no”… they already know that minority proportionality will not be taken into account even when Treasury funds are spent).
If, on the other hand, you want to know and respect the will of the DAO, you must search for what that will is based on 2 options:
a) Based on TVL LQ/ADA of each DEX (the most obvious).
b) Ask in AgoraDAO giving options to choose all DEXs and respect the proportionality of the result (For example, 80%-10%-5%-5%).
- As for the economic calculations of putting everything in the same basket… have you calculated those same numbers in case the single point of failure fails?
a) Risk of 100% centralizing all liquidity boost in a single DEX.
b) Risk of not knowing or respecting the will of the DAO because in this type of voting, for it to be truly respected, preferences must be respected proportionally.
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The future does not have to be the past repeated: Cardano’s TVL is still in its infancy and you talk about Minswap’s TVL of $90 million as if it were a figure so large that it is already unbeatable by any other DEX. However, it is highly foreseeable that more than 99% of the DEX liquidity on Cardano is yet to be allocated.
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I am surprised that they want to justify the supposed benefit for the LQ token in 100% centralization on a single DEX and at the same time it is being built on Cardano. I thought everyone in the community was clear about the security benefits of decentralization.
I will remind you of a few words from Warren Buffet: “Rule #1, never lose money. Rule #2, don’t forget #1.” And it turns out that the best thing to do here is to put all your eggs in one basket…
A hug for everyone!!
Here you have TNT dynamite
DexHunter does not charge a commission if the order is not split across multiple DEXs and is executed on a single DEX.
I recommend always using an order aggregator
Hey Esen, LQ holders always have the ultimate choice and yes we can absolutely change the options to:
- No DEX LP incentives
- Spread liquidity across 4 DEXs (you would need to provide clarity on the metrics, are we going by their average volume/TVL and over what time frame?)
- Minswap Triple Farm (1% 6 months)
- Minswap Triple Farm (2% 12 months)
I voted no on this proposal but not because I don’t think increasing LQ liquidity is necessary, but because I’d like to see the liquidity spread on both Minswap and orderbook DEXs as well.
Please see my response to @Esen we are happy to select an option that bases the DEX incentives off of LQ/ADA TVL of each DEX.
a) Risk of 100% centralizing all liquidity boost in a single DEX.
The other side of this is the risk of fragmenting DEX incentives across multiple DEXs. There are several risks here most notably: a. risk of centralizing swapping volume to rely on Dexhunter aggregator for the best price execution (forcing LQ holders to pay additional aggregator fees for best price execution) and b. risk of onchain or offchain exploit of a newly launched DEX/LP incentives program (essentially this is the smart contract/multisig/general security we place in each DEX we do LP incentives with). While not a risk it should be noted that each marginal addition in DEX we support causes additional Admin work for our team to monitor and manage various incentive programs/POL bots on OB DEXs.
This is my personal opinion only and I am sure other Liqwid Labs team members feel differently but it feels like a lot of work to start rewards programs with any other DEX for the value Liqwid DAO is gaining at the current moment and for the forseeable (next 6-12 months) future. That said I also think this should be revisited quarterly and perhaps an option to do only a 6 month 1% of LQ supply Minswap LQ/ADA LP incentive program should be included in this vote too.
Regardless of the period of time though I think we need to understand that liquidity begets more liquidity and respect power laws.
I would argue with the protocol’s reliance on LQ for the Safety Pool increasing the LQ liquidity is of great importance and something that arguably should have been addressed a long time ago.
Liquidity 75/25 on VyFi in missing
An intermediate solution may fit to reduce operating costs and decentralize liquidity to avoid single points of failure.
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Minimum threshold of 10% of the votes or TVL to qualify for Treasury funds for liquidity.
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Dynamic change if the TVL changes over time.
Still, I understand what you’re saying.
I’m worried that Liqwid will accumulate MIN tokens to make them profitable in ADA and then the MIN token will become worthless over time as competitors emerge with higher TVL and trading volume. I would prefer, if appropriate, to sell the MIN tokens for ADA to loop increase liquidity by adding LQ. It is important that all these points are debated and clarified.
But I understand what you are saying because the profitability for example in Wingriders if you do not have WRT in staking is only 10% for ADA / LQ. You could try to trade with Wingriders, Vyfinance, etc. to obtain a similar profitability to Minswap.
I would like to optimize resources for Liqwid without relying on a single point of failure in time, either as the sole DEX or by accumulating third-party tokens. I don’t know if it will be viable and profitable. I only know that it would be desirable. We have to study it.
I could end up voting yes to any option but I would ask you to think about it 3 more times
It is a delicate decision because it directly affects the conflicting interests of all third parties. All the details would have to be explained as best as possible to convince the greatest number of LQ holders, where I include myself as undecided.
If it is for the good of the LQ token I will vote yes. You have to make sure that the decision is the right one, the best of all possible options.
Where would you get the ADA to farm LP ADA LQ?
I prefer the ratio of 1.1 because it is very fair to LQ share holders