Enable KAR as collateral, bootstrap LKSM/kUSD nad LKSM/KAR LP, partly migrate incentives from KSM to LKSM pairs, payout part of loyalty rewards for KSM pairs

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Summary

We propose to:

  • Enable KAR as collateral at block #1111150 (est. 2021-12-16 06:30 UTC)
  • Enable Bootstrap LKSM/kUSD and LKSM/KAR trading pairs at block #1111300 (est. 2021-12-16 07:00 UTC)
  • Enable Incentive Programs for LKSM/kUSD and LKSM/KAR pairs at block #1111860 (est. 2021-12-16 08:52 UTC)
  • Migrate part of Incentives for KSM to LKSM pairs at block #1111860 (est. 2021-12-16 08:52 UTC)
  • Payout some of Loyalty bonus now for KSM incentive programs

Please, check the previous proposal regarding bootstrapping LKSM trading pairs and enabling/adjusting incentive programs here.

1. Enable KAR as collateral to borrow kUSD

Risk Parameters:

  • Required Collateral ratio: 190%
  • Liquidation ratio: 150%
  • Liquidation Penalty: 15%
  • Stability Fee: ~3% per annum
  • kUSD Mint ceiling: $2 Million

Please, check the previous proposal for enabling KAR as collateral with more details here.

2. Enable Bootstrap for LKSM/KAR pair with parameters:

  • min contribution of KAR: 8 KAR
  • min contribution of LKSM 1 LKSM
  • target of KAR: 2500 KAR
  • target of LKSM: 312 LKSM
  • expected end time: #1111580 (est. 2021-12-16 07:56 UTC)

2. Enable Bootstrap for LKSM/KUSD pair with parameters:

  • min contribution of KUSD: 32 KUSD
  • min contribution of LKSM: 1 LKSM
  • target of KUSD: 10000 KUSD
  • target of LKSM: 312 LKSM
  • expected end time: #1111580 (est. 2021-12-16 07:56 UTC)

3. Enable Incentive Programs for new LKSM pools, migrate part of incentives from KSM to LKSM pools

Moving part of the incentives from LKSM to KSM will encourage the migration of liquidity to the new pools.

:warning: migrating part of incentives for KSM pools won’t impact previously earned rewards or loyalty bonuses.

All incentives changes are expected to start at #1111860 (est. 2021-12-16 08:52 UTC)

LKSM/KAR Pool

  • 62,500 KAR rewards per month (total 375,000 KAR for all program period, 6 months)
  • Loyalty Bonus: 80%
  • The program is expected to run for 6 month
  • Reward amount is expected to be adjusted monthly

LKSM/kUSD Pool

  • 125,000 KAR rewards per month (total 375,000 KAR for all program period, 3 months)
  • Loyalty Bonus: 80%
  • The program is expected to run for 3 month
  • Reward amount is expected to be adjusted monthly

Migrating Incentives from KSM/kUSD pool

  • 40% of KSM/kUSD remaining incentives will migrate to LKSM/kUSD pair, and additional KARs are also allocated, resulting in a total of 125,000 KAR per month for LKSM/kUSD pair
  • reduction won’t impact previously earned rewards
  • release 20% of loyalty bonus now and the remaining 10% will be released at the end of the loyalty program

Migrating Incentives from KSM/KAR Pool pool

  • half of the remaining incentive will migrate to LKSM/KAR pool with additional KAR allocation, which results in a 62,500 KAR reward pool per month
  • reduction won’t impact previously earned rewards
  • release 20% of loyalty bonus now and the remaining 30% will be released at the end of the loyalty program
3 Likes

Hello,

Can we have mathematic example of a user who have today :

  • 100 KAR earn in KSM/kUSD and stop to farm, how many KAR it will have at the end after this proposition ?
    Previously it was 100 KAR + 100 KAR by loyalty bonus (50/50).
  • 100 KAR earn in KSM/KAR and stop to farm, how many KAR it will have at the end after this proposition ?
    Previously it was 100 KAR + 42 KAR by loyalty bonus (70/30).

The loyalty bonus here are at minimum as if some user have claim it will be more.
I need to have math result to understand the impact.

In the previous post, I have 2 questions where it continue to don’t be clear for me.
Can we have details of why reduce the incentive of the 2 previous pool will encourage a more cost-efficient KSM pairs ?
Can we have details of why reduce the Loyalty Bonus ? Specially when we create new pool with 80% of loyalty bonus.

I’m also very happy to see KAR in collateral, new pool and so more activity and opportunity inside Karura.

No Risk - No Fun

2021.12.16 begin?
are you sure?

Can we have mathematic example of a user who have today…

in both cases at the end of the loyalty program, you will have the same amount that you earned, e.g. 200 and 142 KARs respectively.
The difference is that we will payout part of loyalty rewards immediately after the proposal is accepted. Though it won’t impact the final rewards gained previously.

All rewards gained before the proposal is accepted will stay the same, new percentages will be applied only for mining after it.

Can we have details of why reduce the incentive of the 2 previous pool will encourage a more cost-efficient KSM pairs ?

it is cost-efficient because LKSM pair LP will gain staking rewards and therefore more people will be willing to provide LP and better price

Can we have details of why reduce the Loyalty Bonus ? Specially when we create new pool with 80% of loyalty bonus

We are increasing the loyalty %, to encourage more locking of KAR throughout the program and attract longer-term participants.