Right now a solid amount of liquidity rewards are being spent on the KEEP-TBTC pool, which has seen really small traction compared to the ETH pool.
We propose the immediate removal of all KEEP rewards being spent on it.
On top of that, @state has gone through every single tx on the pool in the last 16 hours and all of them were just arbitrage transactions, that is, it seems to have no real usage apart from being arbitraged against.
Why are we seeing this difference in tx count/volume? Here’s a few untested hypotheses:
- Neither TBTC nor KEEP are being used as routing assets, so generally routing algorithms never consider the TBTC/KEEP pool
- Aggregators such as 1inch almost never use it, actually for even a TBTC->KEEP transaction 1inch suggests TBTC->WBTC->WETH->KEEP, thus using the KEEP/ETH pool
- ETH is the main asset and reserve currency on Ethereum, so most people probably want to enter and exit through it instead of TBTC
The ETH pair is driving much more transactions and volume even though the TBTC pair has been awarded more incentives (charts don’t include the last weeks). So, why are we incentivizing it? Furthermore, liquidity on ETH-KEEP should be cheaper since more fees are being awarded to LPs and thus the incentives can be lower for the same APY.
I believe the charts start the 1st of january (around the time liquidity rewards started) and end in the 2nd week of february. It would have been better to have them up to now but I forgot where I have the code that I used to generate them and I think the current sample is representative enough (I originally generated these charts a few weeks ago but I wanted to hold off on the proposal until I got some data to test my hypothesis that TBTC-KEEP is mostly used for arbing, however I’ve now decided that the current findings are enough for this proposal).