Last week we started an incentives campaign targeted at RAI/DAI LPs in Uniswap v3. Details can be found here.
Up until now, RAI/DAI TVL has stayed flat. There are a couple of reasons this might be the case:
- People don’t know that you can provide liquidity at the redemption price without including the market price
- Finding out the redemption price denominated in DAI is hard and confusing
- People don’t like active LPing and prefer to stay on the sidelines
There are a couple of things we could do at this point:
- Stop the campaign and wait for more advanced Uniswap v3 tooling built by the community
- Add more details in our docs and explain that you can LP at the redemption price without including the market price
- Add the redemption price denominated in DAI in our bot feeds on Twitter and Discord
- Require that people LP at the market price instead of the redemption price
The last option is interesting but comes with other challenges:
- The redemption price is more intuitive to LP around. It moves slowly and it’s fairly predictable. The market price, not so much
- There are scenarios where the market can move RAI’s market price to $5, or $2.5 or $10, add all the liquidity at that price and leave very thin liquidity around the redemption price
I’d love to hear what you all think. We should find a solution and test it for a while more or pause the campaign.