Ubeswap Community Steers Platform In New Direction
Cementing a Decentralized Future for Ubeswap through Governance
This post explains two recent Ubeswap governance initiatives that were proposed and passed by the community. UIP-6, (proposal #7 on Romulus); UIP-2, (proposal #3 on Romulus) can be viewed here.
UIP-6: Programmatic UBE Rewards
The Ubeswap Community has successfully steered the Ubeswap platform further toward a decentralized future with the passage of UIP-6 (Ubeswap Improvement Proposal), the latest governance proposal. UIP-6 was proposed, debated, and approved by the community.
This proposal (1) created a generalized framework for UBE distributions to pools and (2) added in UBE single-staking, which will ultimately lead to a new process for more efficient on-chain governance.
Generalized Framework for UBE Rewards Distributions to Liquidity Providers (LPs)
The community agreed on additional metrics and principles to make pool allocations more programmatic. These pool metrics include: 1) Total liquidity, 2) 7-day volume, 3) the ratio of 7-day Volume/Liquidity. The initial choice of metrics is intended to ensure transparency of inputs, and to reflect the real value that each pool adds to the platform.
Thursday, Oct 21 is the first day the new programmatic UBE pool rewards framework will be implemented. Here’s a summary of how UBE rewards distribution changes from the prior week, with the new programmatic framework in place. Note that in certain circumstances as this new methodology is being phased in, bucket weights, pool caps, or change limits can be implemented to reduce outlier results and prevent rewards fragmentation in conjunction with community input and approval. As the governance process becomes more efficient (and implemented through single-staking), these decisions will be made directly through governance.
UBE Single-Staking
Also included in UIP-6 was a proposal for a new UBE single-staking pool, with an initial allocation at 5% of UBE liquidity mining rewards. Since UBE liquidity mining rewards can only be distributed to farming pools, the single staking allocation will come from the community ‘Partnership & Ecosystem’ tranche, which currently contains approximately 15 million UBE. (Note, this represents an incremental 849,792.42 total UBE distributed to liquidity providers throughout the duration of the 312 wk (6yr) mining rewards distribution schedule set at the protocol’s formation should the 5% allocation remain constant over that time.)
The initial UBE Single-Staking contract with rewards should be live as soon as Oct 29, and will start being linked with the governance process. The first week of rewards will be higher, to account for accumulated rewards from Oct 22 up until when the contract goes live for users.
UIP-2: UBE Trading Fee Allocation
Similar to other decentralized exchanges of shared ancestry, a 0.3% trading fee is charged on all token swaps on Ubeswap and distributed to liquidity providers. UIP-2 which was successfully passed by the community a few months ago, allocated 0.05% of that fee to be used for a buyback of UBE to be deposited in a community-controlled time-locked treasury. The beauty of UIP-2 is its simplicity — as platform adoption grows, the Ubeswap community benefits.
The initial implementation of UIP-2 sent the LP contracts to the time-locked treasury, but starting on Oct 21 the next phase of implementation entails the LP contracts will be sent to a multi-sig wallet, manually unpaired and swapped to UBE, then deposited to the community-controlled time-locked treasury. This process is an interim step while the core team creates the smart contract to automate these transactions on behalf of the community.
