Mis-use of Marinade gauges by closed AMM

[felix]

@Hao

For example if the pool was to have bad UX, high withdrawal fees, or other things that would directly or indirectly disincentivize “external” LPs from providing liquidity, opening up the pool would not really help IMO.

@DerMitOhne

If Lifinity just opens the pool up they still do not “function the same ways as other DEXs”. As a market maker Lifinity competes directly with would-be LPs. Therefore they have every incentive to keep them out of the DEX or make their life as hard as possible.
Look, if they open the pool but put a 100% deposit fee thats not really helping the situation at all, even though they “opened the pool”

Is this a “man invents fictional scenario and then gets angry about it” ? The UX is already there for other pools and it’s not bad at all.

Re: withdrawal fees, Lifinity has given no indication that they would introduce them. So if that’s a big concern why not discuss it here rather than flat out refusing to engage with @Durden’s proposal to open up?

@DerMitOhne

I said that since my very first post, Lifinity works different, their LPs are different, the incentives are different, the gauges were not designed for that.

If the pool is opened, it would work like any other DEX (which is why shutting down the gauge makes no sense). The only exception is that the protocol is also a LP in the pool on par with anyone else who wants to deposit.

[DerMitOhne]

@Hao

[…] so we should definitely do the due diligence on the details if we pursue this route.
There should have been more due diligence before opening a gauge, we should definitely avoid passing a handwave-y solution and then 2 months later ending up in the same situation again, because we realized it wasn’t a real solution.

I know reading is hard, but keep practicing and I’m sure you’ll figure it out

[felix]

The point is that bringing up false blockers for this solution with no basis whatsoever doesn’t make any sense. I’m sure eventually you’ll understand

[anon66674515]

@DerMitOhne

If Lifinity just opens the pool up they still do not “function the same ways as other DEXs”. As a market maker Lifinity competes directly with would-be LPs. Therefore they have every incentive to keep them out of the DEX or make their life as hard as possible.
Look, if they open the pool but put a 100% deposit fee thats not really helping the situation at all, even though they “opened the pool”.
I said that since my very first post, Lifinity works different, their LPs are different, the incentives are different, the gauges were not designed for that. The only reason there is so much repeating needed is because you guys apparently can’t read and think further than the Lifinity koolaid you all drank.

Let me translate this so even you can piece together what I’m saying as your continued lack of understanding, as members of mDAO purporting to do due diligence, shows more about you than you think. In this analogy I’m preaching to a choir while you’re out on the corner yelling about the end of the world like a homeless man.

First we’ll start here:

@Hao

we should definitely do the due diligence on the details if we pursue this route.

If you truly care about doing proper due diligence for mDAO, you should start by reading up on Lifinity and what exactly it is offering. Many of you still don’t seem to grasp anything that the protocol does. Perhaps before you speak here you’d be better off educating yourself on the subject matter and not wasting everyone’s time.

Second:
As an organization, mDAO is not tasked with making design decisions for the various protocols that host liquidity pools. We aren’t here to be the arbiter of do’s and don’ts, we don’t get to pick and choose how every protocol operates. Let the market decide which product performs best for its LPs.

If Lifinity wants to charge fees that are different than Orca or Raydium what business is it of mDAO to punish them for doing so? mDAO needs to remain credibly neutral as a DAO. If you’re going to pretend to host an “open system” that every protocol is being encouraged to participate in, then you can’t pick favorites when one of the protocols does something different and shakes up the system.

In your previous post, you’ve even gone as far as creating an imaginary scenario where Lifinity would start charging a 100% deposit fee for the pool. As if any of its other open-for-deposit pools operate this way, assuming as well that this wouldn’t be completely against the spirit of opening its pool. Of course if Lifinity were to behave in this way we would expect mDAO to shut down the gauge, as this effectively does nothing to change the fact that the pool is closed.

Moronic. Complete and utter nonsense, yet here we are again, having to respond to this horseshit. I guess this is how idiots do DD. We’ll just make up an unlimited list of scenarios in which Lifinity is the bad guy and turn this into a shitpost thread.

Lifinity has absolutely zero incentive to destroy its own integrity as a pool provider. Suggesting such is, again, a broad-sided attack on the integrity of Durden and the Lifinity team. Typically after making such accusations, you’d bring some sort of evidence that this was occurring with some of Lifinity’s current open-for-deposit pools. Alas, you’ve once again failed to bring that to the table because it simply doesn’t exist, and suggesting that it does, without even so much as a shred of evidence, shows how little you know about the subject matter which you currently wish to DD.

I get that some of you don’t seem to like Lifinity, because now you’re all going to have to work harder to get your MNDE emissions, but if you’re actually concerned about the success of mSOL, the decentralization of MNDE, and the future of mDAO itself then you must also realize that you’re throwing all of those things down the drain if you choose to become openly hostile towards a participating protocol instead of working with Durden, Lifinity’s team, and Lifinity’s many community members to find a way to move forward that encourages the previously mentioned objectives.

By continuing to argue in bad faith and outright refusing to discuss topics you’ve all shown how truly willing you are to solve the problem.

Lifinity, and its community, have bent over backwards to get to the bottom of this issue for the mDAO, yet the discrimination against us continues. It’s no surprise to me to see those with perverse financial incentives try to shut out their strongest competitor in the gauges.

Edit:
Question for all you brainiacs. How would you ever tell if Orca, Raydium, Saber, Aldrin etc. were LP’ing on their own platforms?
Answer: You wouldn’t.

[Durden]

I think what you are really trying to say, like many others here, is that the gauges shouldn’t work as they currently do, i.e. the amount of MNDE used to vote shouldn’t determine rewards. Instead, it should be based on how much utility is provided by a protocol (however that is measured). I think that’s a fine position to have, but in that case let it be clear that it has nothing to do with Lifinity in particular and should apply to all protocols equally. So if the gauges aren’t going to be changed, Lifinity opening its pools should be sufficient since it will function like any other protocol.

Any protocol can have misaligned incentives, so if there’s going to be “due diligence” on Lifinity, it should be done for all other protocols as well. If Lifinity opens its pool, there is no reason to single it out.

[Durden]

I’m surprised this even needs to be said, but if we open our pool it would function just like all our other open pools – no deposit/withdrawal fees, same LP share of fees, etc. We’re not so shortsighted as to open our pool in a manner that will only serve as a temporary loophole.

[anon66674515]

@DerMitOhne

I know reading is hard, but keep practicing and I’m sure you’ll figure it out

Reading is easy. It’s comprehension which is hard. Clearly you have an issue with the latter.

[Hao]

No, what I am trying to say is exactly what I wrote. Opening the gauge in the current form has been (IMO) a mistake. As we are trying to fix this mistake, we should make sure we spent the necessary time to come up with an actual solution that is vetted and thought through, so we don’t have to readjust the solution again in 2 months.

I have said the same thing about my initially proposed approach to fixing the mistake

@Hao

I’m aware coming up with a sensible metric is challenging and needs a lot of thought as well

After reading some more clarifications on what opening the pool means here and in Discord I don’t see any immediate red flags, but I’m also not the one you need to convince here.
I’ve been asked for my opinion and thoughts so I gave it, nothing more nothing less.

[CryptoBatman]

What do you propose?

I propose the following:

• The prevention of the creation of “permissioned or fully closed pools” liquidity gauges.
• Permissioned - being that having a list of addresses, which are controlled by another entity
• Fully closed - pools that do not accept liquidity or capital from other people

This includes the removal the current Lifinity liquidity gauge where deposits are limited to only Lifinityan d prevent the creation of future closed off or permissioned liquidity gauges.

This proposal would include the removal of Lifinity’s gauge, regardless of whether they choose to open the pools. They are welcome to re-apply for a gauge after this proposal has passed, subject to the Chef’s screening process from start to end.

What is the rationale behind the proposal?

“One of Marinade core value is decentralization, including the spreading of MNDE ownership around the ecosystem, so we should not allow Liquidy Mining Gauges for large pools that are private by design of by lack of community participation, because that leads to a feedback loop of MNDE concentration rather than decentralization”

This was eloquently put by Lucio, and I think serves as a good summary of the “why” of this proposal.

This proposal’s goal is to restore liquidity gauges to it’s original purpose:

“MNDE Liquidity mining serves 2 functions in Marinade:

• it incentivizes staking SOL and using it in DeFi integrations, being a means of acquisition and retention
• it spreads the ownership of MNDE around in the ecosystem to its users, decentralizing Marinade”

This was demostrated by Lifinity. (Lifinity constantly receiving MNDE and relocking it for more MNDE rewards, leading to exponential growth). This proposal aims to solve the root issue (liquidity gauges), and open the door for Lifinity to change their current model (opening the gauges as Durden suggested?) before re-applying for a gauge uner the new model. While many wont believe that this is a pitchfork session on Lifinity, it is really trying to just solve the root problem.

What is the expected positive impact of this change?

The removal of the Lifinity gauge should see more incentives driven towards other AMMs (Orca and Raydium) and other DeFi platforms. While also keeping (hopefully) the liquidity/value add that Lifinity provides. (Once again, I highly suggest a pivot to volume goals instead of shutting the pool and dumping MNDE).

Under a more aligned model, mDAO benefits from Lifinity in a measurable manner, while also encouraging other DeFi protocols to participate. This should see more mSOL TVL growth and mDAO participation from other DeFi protocols.

More MNDE has to come from somewhere else to reward Lifinity, but mDAO won’t be overpaying for Lifinity’s liquidity as much as they are now and discouraging more protocols from acquiring MNDE.

Any other considerations?

There are a few potential risks with the proposal:

1. Will Lifinity stop participation in mDAO, due to the perceived violation of their grant terms?
2. How hard is it to monitor different liquidity gauges that they are playing by the rules (set out here.)
3. How will other DeFi protocols react to this change? Maintaining these relationships between various DeFi protocols and mDAO is important.

Under the proposal, we have Hao from Hedge/Nazare, and Rooter/Nope from the Solend team commenting. It would be ideal to see more DeFi protocols commenting here to ensure that the change is seen favorably. Lifinity has been an active participant in mDAO and would benefit from a pivot in reward mechanism. For the sake of keeping this proposal focused, I suggest we bring up the Lifinity’s volume goals in a separate proposal.

While I feel that a volume based model will aligns mDAO and Lifinity’s interests better than the current model. I note that this was what Lifinity initially proposed, and views upon it negatively… However the current model, Lifinity’s gauge receives 10% of MNDE incentives, regardless of any volume or results achieved, which is less than ideal for mDAO.

I am not arguing that Lifinity is -ev for MarinadeDAO. I am for volume based goals, and a way of quantifiable goals (volume, spread, execution) to be presented and assessed, instead of Lifinity utilizing its MNDE (that it got as a grant) to drive more MNDE to themselves.

This model discourages other DeFi protocols from accumulating MNDE as Lifinity got a headstart for free. (As mentioned by mst from Tulip)

[PlayerOfBits]

Thanks for posting the clarification. Can you elaborate on the rationale behind this?

@CryptoBatman

This proposal would include the removal of Lifinity’s gauge, regardless of whether they choose to open the pools.

Why should Lifinity’s gauge be removed if, once they open their pool, they comply with the same terms as every other protocol?

@CryptoBatman

They are welcome to re-apply for a gauge via onchain vote.

None of Mariande’s Liquidity Mining Gauges have required an onchain vote so far, even if Lifinity chose to include the gauge creation on their proposal. The only reason adding a gauge is currently a permissioned system is to avoid scam pools.

This would make it a Lifinity-specific rule.

[anon66674515]

@PlayerOfBits

Why should Lifinity’s gauge be removed if, once they open their pool, they comply with the same terms as every other protocol?

Quoting you again from Discord: “Currently no other protocol need to apply onchain.”

The intent here from OP is once again obvious, to silence Lifinity’s community, remove Lifinity from the protocol, and then block Lifinity from returning. Hopefully members of mDAO can see through this charade.

@PlayerOfBits

None of Mariande’s Liquidity Mining Gauges have required an onchain vote so far, even if Lifinity chose to include the gauge creation on their proposal. The only reason adding a gauge is currently a permissioned system is to avoid scam pools.

This would make it a Lifinity-specific rule.

[CryptoBatman]

@PlayerOfBits

Thanks for posting the clarification. Can you elaborate on the rationale behind this?

Will elaborate once again. The main reason is because in this forum, there has been plenty of anti-Lifinity voices. These voices should have the opportunity to discuss and vote on a Lifinity gauge.

As noted in Discord, we should not target Lifinity’s gauge and make theirs the only one that requires on chain vote.

I have a suggestion.

Instead of targetting Permissioned and Closed pools, I suggest we tweak the model to also include pools that contain >50% of the liquidity specifically by protocol-owned liquidity. This is easy to monitor (due to the protocol owned liquidity being concentrated by 1 address, or being very clearly documented, and solves the targeting of Lifinity while solving the issue of over centralization initially brought up.

How do i addendum the previous proposal to include this?

[CryptoBatman]

@anon66674515

The intent here from OP is once again obvious, to silence Lifinity’s community, remove Lifinity from the protocol, and then block Lifinity from returning. Hopefully members of mDAO can see through this charade.

It is a bit rich, considering the Lifinity community literally posted a proposal to censure me.
Tribeca - Governance By DAOs, For DAOs. I have no way, and don’t intend to silence your community. I have made changes based on your community’s suggestions, and repeatedly tolerated verbal and cultural abuse.

[felix]

If the pool is open with decent UX, no deposit/withdrawal fees, proportional distribution of fees etc, why should it matter if the liquidity is PO or not?

At that point the liquidity provided by the protocol is the same as everyone else. It’s just as if a “whale” deposited on the pool, which happens regularly in many pools across other DeFi protocols.

Seems unnecessarily targeted, again

[CryptoBatman]

Because POL allows for 1 address to receive all the MNDE rewards, which leads to further centralization and precisely the problem we are trying to solve.

[CryptoBatman]

Retracted the previously suggested changes regarding >50% POL.

I find it amsuing that changes/improvements are demanded, and then shot down constantly and accused of moving the goalpost when made.

Sticking to the proposal. Remove Lifinity’s gauge, introduce a restriction against permissioned/closed pools. Lifinity has to reapply again.

[felix]

In a open pool that’s the same as having whales LPing no? Doesn’t really change if the LP is the protocol or another wallet.

I think the point is making a fair proposal with general content and not targeted at one specific protocol.

[DerMitOhne]

POL is directly competing with LPs. Every DEX that also LPs has a conflict of interests.

[Durden]

This is false. A person who is a member of both Lifinity and Marinade made that proposal. Please do not confuse one person with the Lifinity community, nor that the Lifinity community approves of what they did.

[Durden]

If the pool is open and other people deposit, the POL will not be receiving all the MNDE rewards.