Summary:
The proposal is to create a new FOX-XDAI Regen Farm to keep incentivizing liquidity on Gnosis Chain and reward token holders who are supporting the FOX economy.
Based on the results of the ideation poll the params will be the following:
Length of the program: 6 months
Rewards: 750K in FOX tokens
Setup fees: 5000 FOX + 2% of the rewards (deducted from the 750K)
*Half of the setup fee will be donated to projects on Giveth, half will be kept on the Giveth DAO treasury with no intentions to swap or dump.
Abstract:
The FOX-HNY Regen Farm liquidity mining program will finish on October, 2nd. The FOX Regen Farm gives token holders the opportunity to earn rewards for providing liquidity in FOX and Honey and supporting the FOX economy on the Gnosis Chain.
The first iteration of the program successfully attracted $286,624 USD in FOX liquidity on HoneySwap and incentivized token holders to hodl FOX through the downturn of the market. In the incubation phase of this proposal, the signal is to continue with the Regen Farm program.
Hence, this proposal is to create a new FOX Regen Farm for the next 6 months (3rd of October-2nd of April) for the FOX/xDAI pair.
Motivation:
Increase the liquidity of the FOX token on Gnosis Chain to keep up with the overall growth of the FOX economy on this chain.
Continue rewarding both liquidity providing and holding of the FOX token.
Currently, there is $286,624 USD in FOX liquidity on HoneySwap, incentivized by the FOX Regen Farm on Gnosis Chain. FOX liquidity and number of holders has grown steadily, reaching a circulating supply of 7,930,246.57 xFOX on 08/24/22 and 1115 token holders. Find here other relevant stats. 1
This is an effective and tested solution to increase liquidity on the Gnosis Chain, incentivize holding FOX, minimize sell pressure, keep farmers invested in the long term, and require minimal bandwidth from the FOX team.
Specification:
In the incubation & ideation phase of this proposal, there was a signal on the polls to create a new Regen Farm, but paired with XDAI (a stable asset) due to the current market conditions. A stable asset will act as a force towards a stable price ion FOX, that force would be proportional to the liquidity on the pair.
The vote on the ideation poll showed 750K as the leading option for the rewards. This could presumably increase liquidity on Gnosis 2X. Testing this hypothesis will bring a lot of data to take next steps driven by data. The Giveth team would be able to change the params once the program is running.
Giveth is requesting 5,000 USD and 2% of the FOX rewards to cover the costs of configuring and deploying the farm contracts. Half of both fees would go to the matching fund project on Giveth and the rest to the DAO treasury, where it could potentially be paired with GIV to provide liquidity to both DAOs)
Benefits:
Gain liquidity by crowdsourcing liquidity from token holders who will pair up FOX & xDAI in a liquidity pool.
Incentivize holding FOX. Align the incentives of token holders and the DAO with an outstanding investment opportunity (~75% APR).
Streaming rewards. This favors liquidity providers that want to be exposed to FOX in the long term & keeps them invested in the DAO in the long run by streaming the rewards over a period of time (you choose the length up to December 2026). This also mitigates sell pressure for FOX.
Ready-made UI/UX & development support. All Shapeshift has to do is decide the parameters, supply the reward tokens & be in the loop in coordination with our team.
Tested solution. We already have been using Giveth Regen Farms for the past 6 months and it has worked like a charm.
Bonus: half of the service fees go to donations to fund public goods!
Drawbacks:
Cost. Some of the rewards may be farmed by people not aligned with the FOX economy and dumped. It’s worth mentioning that reward streaming mitigates this drawback.
