Proposal to burn fees from the LYDRA/HYDRA Liquidity pool

:dizzy: Proposal to burn fees from the LYDRA / HYDRA Liquidity pool :dizzy:

Hello Hydra community,

In July 2023 a proposal was passed by the community to deploy a LYDRA / HYDRA Liquidity pool on HydraDEX with a 1% fee on trades. This proposal indicated that the fees earned from the DAO’s liquidity in the Hydra / Lydra Pool are to be used to stimulate deflation.

Today’s proposal aims to determine the community’s choice on how to go about stimulating deflation; in other words, BURNING LYDRA or HYDRA or Both! :fire:

Accumulated fees from the LYDRA/HYDRA pool:

Fees currently accumulated from 12th December 2023 to 26th June 2024 amount to

  • 9,438 HYDRA
  • 28,859 LYDRA

This amount will keep building as transactional volume on the LYDRA / HYDRA Liquidity pool continues.

Possible options to vote for are:

  1. Swap the HYDRA for LYDRA and burn all acquired $LYDRA
  2. Swap the LYDRA for HYDRA and burn all acquired $HYDRA
  3. Burn both, $LYDRA and $HYDRA “as is” received from the Pool Fees

At the current rates on HydraDEX:

  1. If we opt for Option 1, then approximately 58,300 LYDRA will be burned!, therefore locking ~ 58,300 Hydra

  2. If we opt for Option 2, then approximately 18,200 HYDRA will be burned!

  3. If we opt for Option 3, then 9,438 HYDRA and 28,859 LYDRA will be burned!, along with locking 28,859 HYDRA

Values in Points 1 and 2 are subject to change depending on market rates at the time of Burns

As for the frequency of the burn, we can plan for either Monthly or Quarterly. We can discuss this in the below comments and then mention this in the vote in a transparent manner.

The outcome of this proposal will persist after migration to HydraGon too!

This will add yet another burn mechanic to the protocol’s existing burn mechanisms, once HydraGon is launched

  1. On-chain transaction fees will burn HYDRA and LYDRA
  2. Premature withdrawal of vested coins penalties burn HYDRA
  3. (After this Vote) Fees from the LYDRA / HYDRA Liquidity pool will burn HYDRA or LYDRA or BOTH!

Please share your thoughts below and Thank you all for you participation!

3 Likes

Generally speaking, I obviously think this is a great idea :hugs:
What I have trouble figuring out is what’s the best solution for each scenario.
If you’re holding a lot of Lydra, for instance, what would be the best option in terms of improving the Hydra/Lydra ratio, so you can get more Hydra for your Lydra?
And if you currently don’t hold any Lydra,.and only care for Hydra price, which option would suit you best?

2 Likes

Monthly burns would be good imo, Quarterly is also fine but monthly is more regular :wink:

2 Likes

Personally I think burning either of the assets are good since both have their upsides for burns.

  • Burning Hydra causes permanent Hydra deflation
  • Burning Lydra causes Hydra Locking as well as Lydra deflation. There will always be someones Hydra that is locked due to the lesser supply of Lydra available (even if they can buy it from the DEX)

So in short, whatever is burned is good for both types of people. Only Hydra holders as well as holders who hold Lydra and Hydra.

This definitely benefits people who yield farm on HydraDEX :wink:

2 Likes

I’d also bet on monthly burns, to have more impact during HydraGon’s launch period, or right after it. No need to go slow in this, since current price needs a serious pump

1 Like

Personally I also would prefer the burns happening on a monthly basis. Will add a small poll here to keep count and everyone can share their view

At what frequency should the fees be burned?
  • Monthly
  • Quarterly
0 voters

My feeling is for option 2, but I’d have to think about the implications a bit to firm my decision.

2 Likes

I voted monthly a while ago. I like it consistently and steady. Just based on feelings though, if someone has good arguments to why it should be quarterly I would love to hear about them. I wonder when we start this for a real vote by voting with our hydra though?

1 Like