Quick Maths — Update on the Multiplier Pools
- 5 weeks since the start of the new multiplier pools
- Over $18M total value locked up
- $500k given out in rewards
- Number of exits ≤10 per pool
Hey hey, looks like a new crypto cycle is upon us in the name of NFTs. Crypto never ceases to amaze and as such it is important to keep an open mind when exploring. Similarly at Float Protocol, we thought it important to keep an open mind with our BANK distribution pools. Standard staking pools are great, but we felt that they were in need of a bit of refresh. Just over 5 weeks have passed since we launched our first multiplier pools, read on below as we give a summary on how they have performed. 👇
For those just joining — what are the multiplier pools we hear you ask? The new multiplier pools were voted in via governance as a new alternative to the standard pools used to distribute BANK previously. They enable a way to not only reward liquidity providers but also those that are willing to provide liquidity and stake their tokens for the long term. The multiplier pools work in a similar manner to the standard staking pools with the additional feature that a multiplier is applied to staked deposits and that multiplier automatically increases the longer those deposits are staked. The multipliers for the pools are as follows:
For the BANK-ETH sLP, FLOAT-ETH sLP and G-UNI USDC/FLOAT LP pools:
- 1x by default
- 1.25x at 8 days
- 1.5x at 16 days
- 1.75x at 24 days
- 2x at 32 days
- 2.25x at 40 days
- 2.5x at 48 days
- 3x at 60 days
> For example: If you were to stake $1.00 worth of G-UNI USDC/FLOAT LP in the G-UNI USDC/FLOAT LP pool, after 8 days staked it would be treated as $1.25 dollars staked, after 16 days $1.75 dollars staked and so on. You are free to withdraw at any time without an unlock/lock period.
For the BANK only pool:
- 1.3x multiplier for 60 days
- 2x multiplier for 90 days
N.B. There is a 30-day minimum lock on deposits in the BANK-only pool.
> For example: If you were to stake $1.00 worth of BANK in the BANK-only pool you would have to wait for 30 days unlocking period if you request to withdraw your stake. If you stake for 60 days continuously without requesting to withdraw your $1.00 is treated as $1.30 in the rewards pool, for 90 days it is treated as $2.00 in the rewards pool.
So hopefully you get the gist of the mechanics. What has happened? In summary, it looks like those who have staked in all the distribution pools are in it for the long term. In total, $18.2M was staked across all four of the BANK distribution pools and $508k USD worth in BANK rewards (using the average BANK price) was given out over the 5 weeks since their inception (from 1st of August to the 5th of September). This means that over 5 weeks, the pools achieved an average TVL/reward ratio of 36, i.e. 36 dollars locked for each one dollar worth of BANK distributed.
The greatest number of
Exit calls we have had from an individual pool is 10 — that is the G-UNI USDC/FLOAT pool. An
Exit is when someone withdraws their entire stake and simultaneously claims their BANK rewards. The number of
Exit calls don’t show much trend of increasing either, but are skewed towards the later stages of the measured time period. This confirms that the pools are enticing the majority of stakers to provide liquidity for the long term. If we look at the numbers as a whole in terms of all the methods called on the contract i.e.
Exit for the G-UNI USDC/FLOAT pool we see how adhesive these multiplier pools truly are.
The number of
Exit called are approximately 15% of all Method calls since the pool launch and
Stake calls dominates the Methods with over 70% in the 5-week time frame investigated, another confirmation that the multiplier incentives are working. How does this compare to other pools in DeFi? Nansen.ai recently looked at a series of standard staking contracts across DeFi and found that 50% of farmers exited the contracts within 15 days of farming and almost an additional third leaving after 25 days. This means that the new multiplier pools are outperforming some ‘of the most forked contracts in DeFi’ in terms of locking up liquidity. This is still the case if one were to include the
Withdrawal calls with the
Exit calls. The reason for the focus on the G-UNI USDC/FLOAT is because this is a fairly unique token pairing relying on our integration with Gelato and one of the first incentivised low-fee Uniswap v3 pools. For users to get involved in this pool they would have to go to Sorbet.finance stake FLOAT-USDC in return for G-UNI tokens which one can then stake for BANK rewards on Float Protocol. The performance of the other LP pools (BANK-ETH and FLOAT-ETH) performed similarly albeit a bit better with just 9 exits from each pool over the investigated time period.
Looking at the BANK pool, we see similar metrics. The number of
Exit calls (3) are negligible compared to the number of
Stake calls, as one would expect given the minimum 30-day lock on BANK deposits. However, after the 30-day lock period ended we did not see a mass exodus of stakers as often seen in traditional staking contracts with locks. This can be explained by the addition of the multiplier effect on staked deposits. Additionally, those who are often in relatively lower APY pools are often more concerned with accumulating a particular token for a longer term play rather than farming just for short term rewards. These characteristics have lead to $3.6M worth of BANK locked leading to a TVL to reward ratio of 151 over the initial 5 weeks of distribution.
The multiplier pools are very efficient at locking up liquidity of various types while still rewarding long term stakers— the numbers and the blockchain do not lie. With features like these observed one would expect these multiplier pools to gain more prominence across DeFi with a bid to reward more longer term staking of liquidity. There are also other methods of obtaining liquidity such as those through bonding mechanics which have gained traction recently. Looking forward, various combinations of multiplier pools with alternative methods could pave the way to take rewarding LPers in DeFi to the next level.
Backup site: https://ipfs.io/ipns/floatprotocol.eth/#/pools
Telegram (中文): https://t.me/floatprotocolCHN
Data for study was collected on the 5th of September 2021