I would love to learn and receive ideas from our community in a new incentive program. My hope is to present the current idea and see what is the excitement and how it is perceived - to receive critics that helps improve our plans. I am convinced that the collective knowledge of the community on other incentive programs is many times greater than all research time I can devote.
There is a small but fundamental flaw on the incentive design of the NEX token, it rewards regardless of involvement on the community. Meaning it will pay 75% of revenue as dividends even if you just stake and disappear - or worse even if you try to damage Nash. Yes, there is a implicit incentive - but it has shown to be too subtle, people with lower time preference will completely disregard any implicit incentive of a future gain. Yes, we are 100% about bringing finance to everyone, but our goal is to reach that with products and services - the NEX token is primarily a method to reward the community to join us in this pursue of building an open, fairer option in the industry.
So long story short the past few months we have been hard at work on implementing and designing three programs to close the gap on incentives:
A new public market makers (MM) program: its main goal is to bring several professional crypto MM to port their existing systems to work with Nash and try our product. Increasing Nash footprint and market share in the liquidity industry - so we added a set of incentives for crypto MMs. We launched it and discontinued our previous private program recently and you can read about it here: https://blog.nash.io/paid-market-makers-program
A new referral system: its main goal is to reward individuals that help spread the word about Nash and bring active users to our platform. It has been iterated with two sides of the industry, the ones knowledgeable with crypto influencer marketing and companies building software atop Nash platform. We will launch the program as part of our GA plans.
A new liquidity farming program: its main goal is to reward people that take an active role in using the trading platform - be it as a professional trader, a directional trading firm (such as a fund) or our amazing community bootstrapping usage. Is this program that I want to present the first drawings of the idea in this long post and work together with our community.
There have been several innovations in crypto - and a few players have conquered sometimes surprisingly more than some would expect due to the merits of their innovations.
One of such recent innovations is the Uniswap pool reward system - it solves the problem of explicit incentive to users providing liquidity to the platform. However it works-as-it-works in Uniswap because it has no order books, so users can all be part of a “poll” and they are all equally “at the tip” at the market, as a combination of oracle prices and bonding curve defines the price in Uniswap. That is not technically possible on Nash as we are a real limit order book exchange.
Several other players have since used the same mechanism to bootstrap usage on their platform - with one additional twist, by the reward for participation would tokenized and paid in the form of a new token - in most a governance token. This is called yield farming and examples are many but main innovator was Compound.
So borrowing on the ideas of liquidity mining (Uniswap) and farming (Compound) we have been playing with a program that combines both into a liquidity farming program.
Every week a defined reward in NEX (told in advanced for the month) would be defined. Let’s say an example would be 10,000 NEX for the month of September, with 2,500 NEX for every week.
At the closing of the week two rankings would be built - one of takers and one of makers - team, partners and participants on other incentive programs excluded.
The week reward would be split proportionally to each user take was either taker or maker, with 50/50 split of rewards between both sides. Paid directly to users state channels.
To support the program Nash would be provinding technical support in the form of ready-made bots and partnering with bot providers (and other automated execution services).
How exciting is this to our community?
We have no plans to issue new NEX. Any version of this program will test without any inflation. But some projects have been successful to fund their staking and incentives with inflation (like ETH and BTC) - should this be NEX minted? If issued should it instead of paid to state channels be delivered as staked NEX for 1y or 2y? We keep same total supply and have a burn/mint curve a la BTC or a no limit work-reward like ETH?
Other solution ideas to solve this dilemma?
Sorry for the text wall, I am trying to brainstorm with 100s of crypto investors