Switching Rewards from UNI V2 and Bal to UNI V3

Switching Rewards from UNI V2 and Bal to UNI V3

If passed, this proposal will result in stopping rewards to stakers in the Balancer and Uniswap V2 pools and starting rewards for stakers in the new Uniswap V3 pool at either a 1%, 0.3%, or 0.05% fee pool.

Primary drivers for this change:

  • Reducing price impact during trades
  • Decreasing liquidity fragmentation
  • Moving to the latest and more efficient DEX protocol for lower costs

Pool Details (as of 10/13/2021)

Pool Name Balancer
Token Pair APY 80% / USDC 20%
Total Liquidity Available $3.4M
Weekly Rewards Distribution 35K APY
Pool Information Pool management - Balancer
Pool Name Uniswap V2
Token Pair APY 50% / ETH 50%
Total Liquidity Available $5.9M
Weekly Rewards Distribution 35K APY
Pool Information Uniswap Info
Pool Name Uniswap V3
Token Pair APY 50% / ETH 50%
Total Liquidity Available $20.64K
Weekly Rewards Distribution 0 APY
Pool Information Uniswap Info

The four options to vote are explained below:

0.05% Fee Pool on Uniswap V3:
APY.Finance will switch rewards from stakers on Balancer and Uniswap V2 to stakers on Uniswap V3 0.05% Fee pool on TBD

0.3% Fee Pool on Uniswap V3:
APY.Finance will switch rewards from stakers on Balancer and Uniswap V2 to stakers on Uniswap V3 0.3% Fee pool on TBD

1% Fee Pool on Uniswap V3:
APY.Finance will switch rewards from stakers on Balancer and Uniswap V2 to stakers on Uniswap V3
1% Fee pool on TBD

No:
No action will be taken

This proposal should only be approved after allowing for a significant adjustment period favoring early V2 adopters or compensate for IL risk and related missed APY rewards given their investment strategy.

While the reason for the switch are fully understandable, early LP providers like myself, should not be at a disadvantage being punished by IL when switching from V2 to V3 should you still want to receive rewards.

One of the main reasons for doing LP was for me to receive APY staking rewards (app 10 months ago) and its exactly now that my strategy is paying off, as the APY token price is currently again catching-up with ETH after dropping from an 1:800 ratio to a 1:8000 around July. Its exactly this strategy that is allowing me to collect rewards over a longer period of time supporting a smaller token assuming that in some months after launch, the price ratio of APY:ETH is back at a level when I initially provided liquidity. This will allow me to withdraw my V2 token without making my IL permanent.

Of course, one could simply wait with withdrawing the V2 token and not receive APY staking rewards anymore, but this would IMO go against early adopters and there may be many others affected in a similar fashion.

I would hence suggest a) a longer grace period of several months before the switch, b) do the transition gradually allowing both options to co-exist and distribute the weekly distribution accordingly, or c) compensate current V2 holders whose current IL would result in a significant loss with a reasonable one-off reward amount so that they can keep their current V2 token until later.

Thank you!

5 Likes

I’m in the same position as you. I think it’s a good idea to have a grace period, in the case this is approved.

1 Like

me as well…compensation or grace period sounds good to me. thanks

2 Likes

I would first parrot what everyone else is saying about a grace period.

Second, is there a reason we are leaving balancer and the 80/20 pool? I personally prefer the 80/20 pools for lower IL exposure

2 Likes

Exactly, Balancer it’s an excelent option for LP, much more flexible.

1 Like

Can you explain why the fee pool will rise to 1% and what effect that has on my investment? Also, why would we want to vote to quit receiving weekly rewards?
I also like the 80/20 pool.

1 Like

Hello Everyone!

So… in my opinion we should Host 1 pool on Uniswap V3 Eth network and move our balancer 80/20 pool to Fantom Network on Beethovenx.io.

Why Fantom Network?

Gas fees are almost always under 30 cents per txn.
Currently there are over $5 billion dollars operating on the network and it is growing every day.
It has numerous defi protocols with hundreds of millions of dollars locked with attractive/safe yields from curve, geist (aave fork), scream (compound fork), and Yearn just recently bridged there as well. (Fantom is the first place Yearn has bridged to).

Why BeethovenX.io?

BeethovenX is a friendly fork of Balancer and has a great working relationship with the balancer team. There are currently 280 Million dollars on BeethovenX utilizing Balancer tech to its fullest potential. Maintaining the 80/20 pool is my largest priority since this pool allows users to suffer the least amount of IL possible while maintaining a bullish view on $APY and still gaining Txn fees.

Going cross chain unlocks limitless potential to capture THE best yields for our users. With Yearn bridging to Fantom it can only mean one thing… this is where the best yields will be. Lets not leave all the gains to Yearn.

Thank you!

5 Likes

This proposal should only be approved after allowing for a significant adjustment period favoring early V2 adopters or compensate for IL risk and related missed APY rewards given their investment strategy.

While the reason for the switch are fully understandable, early LP providers like myself, should not be at a disadvantage being punished by IL when switching from V2 to V3 should you still want to receive rewards.

I would upgrade to Uniswap V3 in the future and keep Balancer.

3 Likes

I don’t personally have a preference as to which pool would be better or not for liquidity as there are good arguments for and against the move. As such I would err on the side that requires less work and supports those who prefer to keep the 80/20 USDC pool on Balancer, but I would still accept whatever outcome of a vote on the subject.

I do want to point out that if you were to immediately switch from the current UniV2 pool to the UniV3, your IL is the same as it was when you left it in the pool, sans the gas costs of course. It would just continue where you left off. Temporarily permanent impermanent loss. XD

I don’t really know how to sort the same scenario for converting the 80/20 Balancer pool into a new APY/ETH pool. Maybe it would be as easy as selling 30% of the APY for ETH, buying more ETH with the 20% USDC left, then providing LP? Not really sure (and why I’d likely opt for sticking with the pools we have now).

2 Likes

I like the idea of moving the balancer 80/20 pool. It’s going to be good to see if we can take a share of what the Fantom Foundation has offered for projects in their network… over $1B usd value in incentives. I also like the comment on the 80/20 pool and how it enables people to obtain rewards, and also allows them to invest on your token. A lot of people in fantom are looking for projects to put their gains on, they are hungry for another quality project… this could bring in a lot of tvl.

thanks

1 Like

I do like the idea of providing liquidity on another chain for those who want to pickup more tokens without the gas overhead. Not really sure on moving the entire protocol there just yet.

I’m all for and personally do farm on new chains, but they are very risky in their early stages which is why their incentives are more profitable. If the dev team felt comfortable then I’d support it of course, just pointing out that the risk profile drastically increases on the newer chains.

2 Likes

Can someone please break down the various fee-related issues? Is there context for the three fee tiers? I guess it’s as simple as: how much should LP providers be compensated? Would we have a different fee structure than the rest of Uniswap? I thought it was typically .2% or thereabouts…

Basically what you’ve said. It’s how much the fee should be for the risk taken in the pool, taking into account that a higher fee for a low volatility asset pair could impact a users’ choice to swap.

For UniV3, Uniswap suggests that the lower tier of 0.05% would likely be for stablecoin pairs like USDC/DAI, mid tier of 0.3% for more correlated (less volatile) pairs like ETH/DAI, and the higher tier of 1% for “exotic” (extremely volatile) pairs which could be something like Doge/Shib.

Most projects I’ve seen stick with the same fee that UniV2 used and leave it at 0.3%. Doesn’t mean we have to follow the trend, it just seems like that’s the norm.

Thanks @PoggsRed for clarifying the v2 to v3 migration topic. I have to admit I wasn’t aware that you could do this without losing your initial token ratio. If this is the case, I would also support the switch, being mindful of early V2 providers where the related gas fees may be an issue today.

2 Likes

I personally think Uniswap V3 is a great idea for obvious benefits. I have no issues with Gas Fees (I understand others with concerns on Gas Fees, maybe to switching to something completely different is no good, a great L2 solution can be adopted). I think we should focus on ETH blockchain and make sure everything is working great before moving parts into any other blockchain, which I think should come NEXT for greater adoption of APY Finance.

My issue is to understand how 0.3% pool fee will apply? What amount it will correspond to? We need more clarification on this bit to make a decision within a voting.

I would really like to have a pool on Fantom Opera Network. It’s a really fast growing network with much faster txns plus really cheap gas fees. That would bring a whole new network to increase the market cap plus volume and also having an 80/20 pool would keep that bullish going with low IL for those of us who want to hold the token not having to go 50/50

1 Like

this is a great idea. 100% in favor.

I would leave the existing UNI V2 pools as they are and leave the choice of when to unwind the LP to early supporters considering their IL exposure; PLUS I would welcome the addition of the new UNI V3 Pools for all investors old & new to add to their positions and analyze returns. Personally I don’t understand UNI V3 well enough to calculate the best return curve for the ETH pair I am in,therefore I would like to test before I leap applying fresh funds using APY rewards accrued . Keep those accruing please as per the original contract that we entered into …

1 Like

Lost tens of thousands to IL to this moment. There definitely should be a grace period after launch to at least cover some of it.

2 Likes