The Univ3 Farm is being taken advantage of.. We need to fix it

From my understanding, we can’t change the way rewards are being distributed by univ3. We couldn’t even set it to change according to some pattern when it started - like we did for the other pools like balancer. The only thing we could do it stop it, and restart with lower rewards.

The plan for what to do after stopping the rewards is not yet set in stone, but we are working on token swaps and other ways of creating DAO-owned liquidity. Because of your experience and interest, it would be really great to have you jump into our governance, GIVeconomy or treasury management calls and offer your opinion.

Today I will create a new forum post regarding what to do after stopping the univ3 rewards. The snapshot vote was a unanimous “yes” and soon to finish… so we will likely go ahead with stopping the rewards.

My whole point is that the reward distribution by Uni v3 is good, totally aligned with whole concept of “concentrated liquidity”, just nobody knows about it. Active LPs will stay silent, it’s not in their best interest to talk loudly about 4 digits APR.

Instead of shutting it down, why not go to /r/ethfinance daily thread, write a comment on this and see what happens.

It’s great that the plans to create alternatives, but in my opinion those alternatives should be introduced in parallel with shutting down existing Uni v3 program, so that there’s no liquidity crisis in the meantime.

I just don’t understand why Uniswap pool has to be shut down completely. If 3800% APR is too high, why not just cut rewards in half. Or reduce to 30% or whatever?

The problem is it isn’t really technically feasible to minimize it slowly :frowning: The reward token “value” could be reduced… but we can’t connect it to the date that people were staking, people harvest when they want and well it would just take A LOT of accounting and development power to do this in any other way than just turning it off and doing a snapshot and making sure everyone gets the rewards they earned.

I would be interested in starting up the program again IF we could limit rewards to people who set ranges to be 10 ticks or more. Otherwise expert Liquidity Providers will be advantaged over the general community and I think attracting more expert/professional LPs creates more downward pressure on the price because the professionals are more likely to sell their rewards where as if community members who want more GIV are able to participate in a “lazy” way they would be more likely to accumulate $GIV

We can restart it with lower rewards… for sure… and maybe that will be what we do… but the first step is to turn it off and make sure we can get everyone who earned rewards the GIV they earned, then we can look at what options we have.

1 Like

I don’t think there will be a liquidity crises, most of the issuance of GIV is on xDai and the liquidity there is strong.

The crises will be coming from our mistake of over rewarding UniV3 if the people playing that game decide to dump.

It might create a short term issue, but leaving this up until we have a replacement exasperates the eventual issue IMO, it’s just putting more GIV into the hands of professional LPs who probably don’t care about the success of Giveth over all.

I think we are better off to take a smaller hit now than a bigger hit later…


I kind of like this idea for dealing with it now… we still have a week of rewards and this could help distribute the rewards more widely…

I see a lot of talk about “expert”/“professional” LPs. To me, it’s a bit of an overstatement. There’s nothing really expert about maintaining tight, if possible even single tick liquidity. There are thousands of such “experts”. This is how all pools on Uniswap v3 work. LP only get fees from liquidity in the active tick. Yes, Uni v3 is much more complex than v2, I can agree with that, but there’s nothing inherently more expert in a way GivFarm for v3 works. We’re not talking about gamma hedging with options or “flash liquidity” (those are hot topics among real pros here), we’re talking about regular LPs on v3. Yeah, this is not for everyone, especially when gas is expensive, but it’s not just for people with math/finance/quantum physics PhD and billions in wallets.

Those rewards (no matter if we mean Uniswap fees or GIV rewards) don’t come for nothing. There’s one thing that it’s almost completely missing from this conversation, which is the risk. LPs in such tight ranges are subject to very high impermanent loss risk.

Overall I think current structure is quite OK.

There’s passive, no risk staking for GIV, there’s low risk Balancer pool, and there’s high risk Uniswap v3 pool.

1 Like

Personally I don’t like this idea.

Two things that can be done in this direction:

– Using 1% pool (gives 3x wider ranges plus GIV/ETH belongs to this tier, not to 0.3%)
– Using v2

Trying to fix v3 (where it’s not broken IMO) is a bad idea.

Could you elaborate on this a bit? What steps are needed to “make sure we can get everyone who earned rewards the GIV they earned”?

The snapshot has passed with unanimous Yes’s. This forum post was linked in the vote, so the entire discussion was available to everyone.

We will be asking people to claim their rewards via Twitter, Discord, comms in general. If they do not claim by March 21, before we shut off the rewards, we will take a snapshot of the stakers and rewards earned and distribute them (via GIVbacks, most likely) so that the people who earned can get their rewards.

OK, you mean the “immediate” part of rewards, right?

Yeah, the rewards that people earned and did not claim up until March 21.

OK, I don’t know all the details, but isn’t it just possible to leave it as “disabled” pool with only option to Unstake and Harvest? (Don’t forget about Unstake option!)

As the time for claiming aproaches, we should be mindful of the number of people that have managed to unstake their positions. If the percentage is still too low, we could consider extending the cutoff deadline by a small amount of time (12h?) to allow stragglers to catch up.

I’m not sure if this would be considered as a breach of the agreed upon proposal, but it’s worth considering in my opinion.

People will still be able to unstake afterwards, and we have the data to send the rewards to everyone who didn’t harvest, right? We’re able to hit “go” on the multsig tx.

Yes! Only a few staked positions remain, and we can log them appropriately. Nothing prevents us from turning the program off.

1 Like

The rewards are off! Full description:

Currently working on distributing any unclaimed GIV to their owners.

I’m a bit confused with the latest Snapshot vote (Should we end the mainnet GIVsteams of the univ3 “middle fingers”). It points to this discussion, so I initially voted For since I thought it was a vote for halting the univ3 LM program.

Then I realized that this vote was long past, and the new one is for preventing the 3 addresses that capture most of the rewards to terminate their streamed rewards.

I turned my vote to “Abstain” for now. I’m uncomfortable with this decision and I would like to have more information. It is admitted here that the design of the rewards system was inadequate. I’m not a maximalist at all when it comes to immutability, but it’s troubling to me that rewards duly acquired by playing the rules (and taking the risk of IL) could be blocked that way. I also agree with comments above emphasizing the fact that liquidity rewards are, well, for providing liquidity, and as we say in French, l’argent n’a pas d’odeur" - “money has no smell”. Ensuring that the token distribution targets the people aligned with the project’s purpose is a different objective, there are already other mechanisms in place to that end. I don’t like the “middle finger” characterization, even though I found it funny. But it’s complicated to attract economically rational actors with money-making mechanisms, only to tell them after they succeed that they were bad guys who will be punished because they were too good at it (and I’m saying this as someone staking or giving all my GIV and never selling any up to now).

To make it short, here’s what I’d love to learn about in order to make my final decision:

  • did these addresses already receive a substantial reward out of their LP activity? How does it compare to what’s left and that we want to block?
  • why wasn’t it a dedicated post to discuss this particular decision? or maybe I missed it and the link in snapshot was just the wrong one?
  • do we have any idea of the risk created by a sell pressure of 2.6M GIV on the project? Secondary markets are also a way to increase the distribution of a token. The main issue is to see the token tanking, not that it’s accumulated by a few actors, since they seem selling anyway.

Thank you!

1 Like

Complementary comment: I contribute to a project that will enable market making strategies (à la Uni V3, or more sophisticated ones) to be democratized. It if succeeds, “middle finger” people’s interests will be aligned with those of any non-expert willing to provide liquidity, and get rewarded for it. Not available in the short term though.

@bobsledder23 @reuptaken and anyone interested in market making strategies, I’d love to pick up your brain if the idea appeals to you :pray:

There’s another thread more related to the snapshot vote here - Should we stop the Mainnet GIVstreams of Univ3 Middle Fingers?7 - #12 by Griff

1 Like

Thank you @mitch, everything is much clearer now! :pray: :pray: :pray:

1 Like