This is a proposal to terminate the disproportionate mainnet GIVstreams allocated to 3 address who took advantage of information asymmetry & got huge earnings from providing one-tick liquidity in Univ3 rewards program.
As you most likely remember, a couple of months after launch we learned an information asymmetry in our Univ3 pool. We designed the rewards program assuming that GIV rewards were distributed proportionally according to the amount of in-range liquidity provided, and later learned that significantly more rewards are given to LPs who provide concentrated liquidity. The highest rate of reward goes to in-range univ3 NFTs that are only 1-tick wide.
After learning this and learning of some addresses taking advantage of the Univ3 rewards program, the community voted to terminate the Univ3 rewards program. For more info check out this summary tweet thread, snapshot vote and original forum post.
@amin prepared a document to summarize some of the data from addresses (on Mainnet) who took advantage of the Univ3 rewards program. I am proposing to consider terminating the Mainnet GIVstream of 3 address according to the following criteria:
- Earned over 100k of Mainnet GIV through univ3
- Provided 1-tick liquidity on univ3
- Didn’t earn significant rewards from other means on mainnet
The addresses & the amount of GIV in the token distro allocated to their addresses on mainnet as of March 15, 2022 are as follow:
In this doc you can see the size of each univ3 position ever owned by each address under “Range of Positions Click to expand!”. A range of “60” means that the position was provided with only a 0.6% range around the current price - this is the smallest possible range one can provide (one-tick). A range of 120 is 2-ticks and so on. Here is a screenshot corresponding to the 1st address:
You can see that each of the aforementioned addresses created several univ3 NFTs that were only 1-tick wide.
For each address, you can also see the number of total allocations from the Mainnet Token Distro, and which of those came from other (non-uniswap) sources. Reviewing the data, you can see that the non-uniswap allocations for these 3 addresses were quite small.
You can see the start date of each address’s mainnet GIVstream in the following table:
|Recipient||Stream Start Time (GMT)||From||Transaction Hash|
|0x213439b642dbb9d5ee7bafdafb1f33f9ab8b7e35||December 24, 2021 18:26:56||Uniswap||0x66d4bae4fd88a13913dd071b4c33e8f38a665d57ad2a44f636d9b4feaec77362|
|0xb66edbf805783e67a9b1039f7524e5009631c847||January 9, 2022 5:36:15||Balancer||0x8ed0549cc07cb74b756e90918ce4342d8e37b711e10f815c4007dc156f3d5bed|
|0x261f436676cfa456a8f086a850160e97550aea9c||February 1, 2022 10:18:25||Balancer||0x9ad15cac2d213020809d3608e11bf1a0239659bd4370f9d16731e979ff0edf35|
Note: For reference, our team first became aware of the Univ3 one-tick issue around February 9, 2022.
All these addresses were on the profitable side of the information asymmetry: earning huge yields by interacting with the GIVeconomy predominately in this one way. They have already earned a significant amount of liquid GIV. This proposal is to consider ending the streaming portion earned on mainnet.
FYI (before you ask) - the reason we cannot end only the streams from one-tick Univ3 rewards earnings is because it is extremely difficult to determine how much GIV was earned from each individual NFT position. We could determine the total amount remaining in the token distro from univ3 rewards, but these users have already received generous amounts of liquid GIV from their exploits so I am proposing to end all rewards allocated to them in the token distro on mainnet.
We setup the univ3 rewards program under incorrect assumptions, and in fact, allocated excessive rewards to this pool if you consider the rewards program mechanics. It should not have been so easy for just a few addresses to earn over 2.6 million GIV from farming rewards in just a few short months.
The amount of GIV going to these addresses makes their total allocations on mainnet alone even higher than the total allocations of many of our long-term or top contributors. This is significant governance power in the hands of address who where exploiting the univ3 system.
All parties still get lots of rewards. We would not be touching GIVstream on Gnosis Chain, or all liquid GIV they already received from these streams that have been flowing now for months. Any streaming rewards earned from GIVbacks, GIVdrop or the GIVfarm on Gnosis chain will remain the same. We are only proposing to stop the excessive streams on mainnet which were predominately earned from univ3 exploits.
If we let hackers or bad actors exploit our systems and get away with it, more people will look to exploit us. Because of the GIVstream, we have an opportunity to terminate unreasonable rewards gleaned from exploitation. It is the responsibility of our community to decide how to proceed, and which behaviours we wish to reward.
I am proposing to terminate these three mainnet GIVstreams because I believe it is in the best long-term interest of Giveth, $GIV and the GIVeconomy.
I suggest that we use this recovered GIV for rewards for mainnet liquidity mining.
- Sort of, I have another suggestion
It is thanks to one user (name kept private from this forum post) that we discovered this issue in the first place. They noticed they were not getting the right rewards for full-range liquidity & started asking questions. They did some research and experimentation and discovered the biggest one-ticker )the first address) that led to use eventually turning off the rewards program. This was hugely helpful information and I think that this kind of support from our community members should be rewarded. I am additionally proposing to reward this user with a bounty of 50,000 GIV liquid from the GIVgarden.
- Sort of, I have another suggestion