Just fairly quickly on today’s numbers. So we know there’s issues with the docs on the emissions page. But I found somewhat of a fix. The individual pages for the V1 LPs does have a SAUCE/day number for those LPs with farm emissions. There’s still some rounding error has added the totals does get me about 7k more SAUCE per day than compared to the 59.82 SAUCE/min number in the docs. That would make it have an error of +9%). Still, it would correct the relative emissions weights. Things like SAUCE/SpaceApe and HBAR/Bull actually having different emissions rates are fixed.
A slightly more accurate farm weight table
| V1 Pool | SAUCE/day | Farm weight (recalculated) | Lidquidity | Total APR | Fees APR | Rewards APR | Special APR |
|---|---|---|---|---|---|---|---|
| HBAR/SAUCE | 36,530 | 38.85% | $7,583,954 | 13.55% | 1.05% | 12.50% | |
| HBAR/HBARX | 18,450 | 19.62% | $10,886,302 | 6.72% | 0.01% | 4.38% | 2.33% |
| HBAR/USDC | 11,870 | 12.62% | $2,786,934 | 17.40% | 6.43% | 10.97% | |
| HBAR/XSAUCE | 3,650 | 3.88% | $713,917 | 16.35% | 1.02% | 13.27% | 2.06% |
| USDC/SAUCE | 2,340 | 2.49% | $229,555 | 29.41% | 3.12% | 26.29% | |
| HBAR/PACK | 2,190 | 2.33% | $612,193 | 20.55% | 0.87% | 19.68% | |
| HBAR/WBTC[hts] | 2,010 | 2.14% | $334,308 | 17.17% | 1.73% | 15.44% | |
| HBAR/HST | 1,830 | 1.95% | $487,473 | 10.25% | 0.39% | 9.86% | |
| HBAR/WETH[hts] | 1,830 | 1.95% | $256,208 | 19.61% | 1.26% | 18.35% | |
| HBAR/LCX[hts] | 1,640 | 1.74% | $238,974 | 19.22% | 1.29% | 17.93% | |
| HBAR/KARATE | 1,640 | 1.74% | $150,725 | 36.97% | 8.00% | 28.97% | |
| HBAR/QNT[hts] | 1,280 | 1.36% | $291,150 | 12.12% | 0.74% | 11.38% | |
| SAUCE/XSAUCE | 1,100 | 1.17% | $1,082,366 | 5.05% | 0.37% | 2.62% | 2.06% |
| HBAR/DAVINCI | 913 | 0.97% | $360,512 | 39.33% | 1.13% | 38.20% | |
| HBAR/BSL | 913 | 0.97% | $680,193 | 38.38% | 6.46% | 31.92% | |
| HBAR/WAVAX[hts] | 730 | 0.78% | $209,176 | 11.28% | 2.30% | 8.98% | |
| HBAR/LINK[hts] | 730 | 0.78% | $146,733 | 14.10% | 1.24% | 12.86% | |
| SAUCE/GRELF | 547 | 0.58% | $126,437 | 13.85% | 2.67% | 11.18% | |
| HBAR/DOVU | 547 | 0.58% | $133,364 | 23.69% | 12.96% | 10.73% | |
| HBAR/SENTX | 547 | 0.58% | $44,294 | 33.39% | 0.99% | 32.40% | |
| HBAR/CLXY | 547 | 0.58% | $62,090 | 26.32% | 3.61% | 22.71% | |
| HBAR/JAM | 547 | 0.58% | $48,487 | 44.17% | 14.53% | 29.64% | |
| HBAR/STEAM | 547 | 0.58% | $156,013 | 40.73% | 1.20% | 39.53% | |
| HBAR/HSUITE | 547 | 0.58% | $136,104 | 37.18% | 13.79% | 23.39% | |
| SAUCE/SAUCEINU | 365 | 0.39% | $197,039 | 18.17% | 9.72% | 8.45% | |
| SAUCE/SpaceApe | 109 | 0.12% | $22,646 | 13.81% | 0.73% | 13.08% | |
| HBAR/BULL | 73 | 0.08% | $37,960 | 10.77% | 1.55% | 9.22% |
Now to the bulk of the proposal. Since the Core team has shown a spotlight on trading volume over vanity TVL, I would like to take a look at trading fees APR of these pools.
Note: I do understand the concern of low liquidity pools maybe manipulating Fees APR with inorganic trading volume. Hopefully using a liquidity weighted average would tamper some of the fluctuation caused by such activity. Also, such inorganic activity would burn themselves out eventually. Additionally, emissions cuts would only really focus on LPs that are really underperforming, and not just being a few ticks under.
Cuts based on underperforming trading fees APR
The table below has the V1 Pool, trading Fees APR and potential cuts for these pools depending on how aggressive cuts could be.
Table
| Column 1 | Fees APR | Liquidity Weighted average | Underperform ratio (negative number means LP is doing better than average) | Potential aggressive cuts | Potential cuts | Potential cuts (conservative) |
|---|---|---|---|---|---|---|
| HBAR/SAUCE | 1.05% | 1.56% | 0.33 | 0.04 | 0.01 | 0.00 |
| HBAR/HBARX | 0.01% | 1.56% | 0.99 | 0.98 | 0.97 | 0.97 |
| HBAR/USDC | 6.43% | 1.56% | -3.12 | - | - | - |
| HBAR/XSAUCE | 1.02% | 1.56% | 0.35 | 0.04 | 0.01 | 0.01 |
| USDC/SAUCE | 3.12% | 1.56% | -1.00 | - | - | - |
| HBAR/PACK | 0.87% | 1.56% | 0.44 | 0.09 | 0.04 | 0.02 |
| HBAR/WBTC[hts] | 1.73% | 1.56% | -0.11 | - | - | - |
| HBAR/HST | 0.39% | 1.56% | 0.75 | 0.42 | 0.32 | 0.24 |
| HBAR/WETH[hts] | 1.26% | 1.56% | 0.19 | 0.01 | 0.00 | 0.00 |
| HBAR/LCX[hts] | 1.29% | 1.56% | 0.17 | 0.01 | 0.00 | 0.00 |
| HBAR/KARATE | 8.00% | 1.56% | -4.12 | - | - | - |
| HBAR/QNT[hts] | 0.74% | 1.56% | 0.53 | 0.15 | 0.08 | 0.04 |
| SAUCE/XSAUCE | 0.37% | 1.56% | 0.76 | 0.44 | 0.34 | 0.26 |
| HBAR/DAVINCI | 1.13% | 1.56% | 0.28 | 0.02 | 0.01 | 0.00 |
| HBAR/BSL | 6.46% | 1.56% | -3.14 | - | - | - |
| HBAR/WAVAX[hts] | 2.30% | 1.56% | -0.47 | - | - | - |
| HBAR/LINK[hts] | 1.24% | 1.56% | 0.21 | 0.01 | 0.00 | 0.00 |
| SAUCE/GRELF | 2.67% | 1.56% | -0.71 | - | - | - |
| HBAR/DOVU | 12.96% | 1.56% | -7.30 | - | - | - |
| HBAR/SENTX | 0.99% | 1.56% | 0.37 | 0.05 | 0.02 | 0.01 |
| HBAR/CLXY | 3.61% | 1.56% | -1.31 | - | - | - |
| HBAR/JAM | 14.53% | 1.56% | -8.30 | - | - | - |
| HBAR/STEAM | 1.20% | 1.56% | 0.23 | 0.01 | 0.00 | 0.00 |
| HBAR/HSUITE | 13.79% | 1.56% | -7.83 | - | - | - |
| SAUCE/SAUCEINU | 9.72% | 1.56% | -5.22 | - | - | - |
| SAUCE/SpaceApe | 0.73% | 1.56% | 0.53 | 0.15 | 0.08 | 0.04 |
| HBAR/BULL | 1.55% | 1.56% | 0.01 | 0.00 | 0.00 | 0.00 |
Hopefully it would be easier to get data for all the pools, so we can compared the Fees APR of pools without emissions as well.
As seen from above, HBAR/HBARx barely generates fees for the amount of liquidity it has, which is why the Core team proposed to cut all their emissions to send to Development accounts. For the purpose of this proposal, I will leave HBAR/HBARx cuts out as I don’t think the Core team’s proposal would have much difficultly passing.
I propose a 0.32 emissions weight cut to HBAR/HST and 0.34 emissions weight cut SAUCE/XSAUCE.
This would translate roughly HBAR/HST having 1,830 SAUCE/day to 1,244 SAUCE/day and SAUCE/xSAUCE having 1,100 SAUCE/day to 726 SAUCE/day.
Cuts based on the ratio of trading fees APR to rewards APR
Basically translate to for every dollar of SAUCE of rewards going to an LP, we expect X amount of dollars in trading fees. When weighting the ratios based on emissions weight, we expect about $0.15 fees for every $1 of SAUCE emitted to the pools.
Such a table would look like this
| V1 LP | Farm weight | SAUCE per Day | Liquidity | Fees APR | Rewards APR | Ratio Fees/Rewards |
|---|---|---|---|---|---|---|
| HBAR/HBARX | 19.62% | 18,450 | $10,886,302 | 0.01% | 4.38% | 0.00 |
| HBAR/DAVINCI | 0.97% | 913 | $360,512 | 1.13% | 38.20% | 0.03 |
| HBAR/STEAM | 0.58% | 547 | $156,013 | 1.20% | 39.53% | 0.03 |
| HBAR/SENTX | 0.58% | 547 | $44,294 | 0.99% | 32.40% | 0.03 |
| HBAR/HST | 1.95% | 1,830 | $487,473 | 0.39% | 9.86% | 0.04 |
| HBAR/PACK | 2.33% | 2,190 | $612,193 | 0.87% | 19.68% | 0.04 |
| SAUCE/SpaceApe | 0.12% | 109 | $22,646 | 0.73% | 13.08% | 0.06 |
| HBAR/QNT[hts] | 1.36% | 1,280 | $291,150 | 0.74% | 11.38% | 0.07 |
| HBAR/WETH[hts] | 1.95% | 1,830 | $256,208 | 1.26% | 18.35% | 0.07 |
| HBAR/LCX[hts] | 1.74% | 1,640 | $238,974 | 1.29% | 17.93% | 0.07 |
| HBAR/XSAUCE | 3.88% | 3,650 | $713,917 | 1.02% | 13.27% | 0.08 |
| HBAR/SAUCE | 38.85% | 36,530 | $7,583,954 | 1.05% | 12.50% | 0.08 |
| HBAR/LINK[hts] | 0.78% | 730 | $146,733 | 1.24% | 12.86% | 0.10 |
| HBAR/WBTC[hts] | 2.14% | 2,010 | $334,308 | 1.73% | 15.44% | 0.11 |
| USDC/SAUCE | 2.49% | 2,340 | $229,555 | 3.12% | 26.29% | 0.12 |
| SAUCE/XSAUCE | 1.17% | 1,100 | $1,082,366 | 0.37% | 2.62% | 0.14 |
| Emissions-weighted Average ratio | 0.15 | |||||
| HBAR/CLXY | 0.58% | 547 | $62,090 | 3.61% | 22.71% | 0.16 |
| HBAR/BULL | 0.08% | 73 | $37,960 | 1.55% | 9.22% | 0.17 |
| HBAR/BSL | 0.97% | 913 | $680,193 | 6.46% | 31.92% | 0.20 |
| SAUCE/GRELF | 0.58% | 547 | $126,437 | 2.67% | 11.18% | 0.24 |
| HBAR/WAVAX[hts] | 0.78% | 730 | $209,176 | 2.30% | 8.98% | 0.26 |
| HBAR/KARATE | 1.74% | 1,640 | $150,725 | 8.00% | 28.97% | 0.28 |
| HBAR/JAM | 0.58% | 547 | $48,487 | 14.53% | 29.64% | 0.49 |
| HBAR/USDC | 12.62% | 11,870 | $2,786,934 | 6.43% | 10.97% | 0.59 |
| HBAR/HSUITE | 0.58% | 547 | $136,104 | 13.79% | 23.39% | 0.59 |
| SAUCE/SAUCEINU | 0.39% | 365 | $197,039 | 9.72% | 8.45% | 1.15 |
| HBAR/DOVU | 0.58% | 547 | $133,364 | 12.96% | 10.73% | 1.21 |
Looking at those that are generating less than $0.11 in fees per $1 SAUCE emitted, I could see the following cuts proposed.
| V1 LPs | SAUCE per day | Fees APR | Rewards APR | Ratio Fees/Rewards | Proposed SAUCE per day |
|---|---|---|---|---|---|
| HBAR/DAVINCI | 913 | 1.13% | 38.20% | 0.03 | 527 |
| HBAR/STEAM | 547 | 1.20% | 39.53% | 0.03 | 321 |
| HBAR/SENTX | 547 | 0.99% | 32.40% | 0.03 | 322 |
| HBAR/PACK | 2,190 | 0.87% | 19.68% | 0.04 | 1631 |
| SAUCE/SpaceApe | 109 | 0.73% | 13.08% | 0.06 | 91 |
| HBAR/QNT[hts] | 1,280 | 0.74% | 11.38% | 0.07 | 1141 |
| HBAR/WETH[hts] | 1,830 | 1.26% | 18.35% | 0.07 | 1661 |
| HBAR/LCX[hts] | 1,640 | 1.29% | 17.93% | 0.07 | 1511 |
| HBAR/XSAUCE | 3,650 | 1.02% | 13.27% | 0.08 | 3427 |
| HBAR/SAUCE | 36,530 | 1.05% | 12.50% | 0.08 | 35,029 |
| HBAR/LINK[hts] | 730 | 1.24% | 12.86% | 0.10 | 716 |
In terms of emissions cut ratios,
0.42 emissions weight cut for HBAR/DAVINCI
0.41 “-- --” Steam/HBAR
0.41 “-- --” HBAR/SENTX
0.26 “-- --” HBAR/PACK
0.16 “-- --” SpaceApe/SAUCE
0.11 “-- --” HBAR/QNT[hts]
0.09 “-- --” HBAR/WETH[hts]
0.08 “-- --” HBAR/LCX[hts]
0.06 “-- --” HBAR/XSAUCE
0.04 “-- --” HBAR/XSAUCE
0.02 “-- --” HBAR/LINK[hts]
Cuts amounts have similar reasoning to previous set of cuts, mainly to more focus on those greatly underperforming over those that are just slightly underperforming on metrics.
Putting it all together, I proposed the following cuts
| V1 LPs | Current SAUCE/day | Proposed SAUCE/day emissions rate | Change SAUCE/day rate | Ratio change |
|---|---|---|---|---|
| HBAR/SAUCE | 36,530 | 35,029 | -1,501 | -0.04 |
| HBAR/XSAUCE | 3,650 | 3427 | -223 | -0.06 |
| HBAR/PACK | 2,190 | 1631 | -559 | -0.26 |
| HBAR/WETH[hts] | 1,830 | 1661 | -169 | -0.09 |
| HBAR/HST | 1830 | 1244 | -586 | -0.32 |
| HBAR/LCX[hts] | 1,640 | 1511.00 | -129 | -0.08 |
| HBAR/QNT[hts] | 1,280 | 1141.00 | -139 | -0.11 |
| SAUCE/xSAUCE | 1100 | 726 | -374 | -0.34 |
| BAR/DAVINCI | 913 | 527 | -386 | -0.42 |
| HBAR/LINK[hts] | 730 | 716 | -14 | -0.02 |
| HBAR/STEAM | 547 | 321 | -226 | -0.41 |
| HBAR/SENTX | 547 | 322 | -225 | -0.41 |
| SAUCE/SpaceApe | 109 | 91 | -18 | -0.17 |
Total of 4549 SAUCE/day change (but given the 9% error, I expect the emissions changes to be closer to 4139 SAUCE/day). If there’s any discrepancies from the calculated data to the actual emissions rates (whether from various sources of rounding error), please do focus on the relative emissions rate cuts (cutting HBAR/SAUCE emissions rate by 4%, HBAR/xSAUCE by 6%, etc,). I do trust that the data on the SaucerSwap UI is up to date with the rewards data on V1 pools.
Acknowledgments
...
I very much like @LemonCharKwayTeow’s idea that was mentioned earlier. Data gathering issues aside, it would give a holistic view of LPs performances over longer periods of time. I hope someone could gather that data, and make a time graph with it, so we can follow an LP (as a point) moving across the Liquidity and Fees generated plane over time. It would certainly make for a great data visualization project. Also I share the same concerns of Trading fees APR being manipulated in low liquidity pools, but I do hope the 7 day average smooths some it out.
Also, would like to thank them again. When typing up this cuts proposal, the Trading fees APR/ rewards APR just only came up to me after reading this comment
Just thoughts from perspective of $sauce holders like we reward based on how much LP Pool fees Profits that it gives us.
I was really struggling in having cuts to pools with very high rewards APR when some of those LPs had good trading fees numbers, but using the ratio idea helped a lot.
Also would like to thank @UgOs for getting me interested in thinking about metrics based justifications for proposals in the first place.