Switcheo’s TradeHub Improvement Proposal #5 has successfully passed, rebalancing rewards for spot liquidity pools according to trading volume. Following the Dec. 31, 2020 vote conclusion, the pool reward weights were automatically implemented on the TradeHub platform.
To incentivize token holders to provide liquidity to Demex markets, a percentage of SWTH’s monthly inflationary supply is currently being diverted as rewards for LP providers. TIP #5 rebalances the reward weights from its previous levels to be more in line with market conditions. Switcheo had determined that some pools were unable to attract LPs despite high APRs, effectively wasting rewards, while others would benefit from increased rewards to keep them competitive.
For example, the the CEL/USDC and NEX/USDC markets brought less than $150,000 in liquidity combined, contributing to 2.59% of trading volume, while receiving a 6.9% of the rewards.
Among the noticeable changes, rewards have increased from 12x to 18x for SWTH/USDC, from 2x to 8x for ETH/wBTC, and from 1x to 2x for the nNEO/USDC markets. A complete overview of the revised weights, reward shares, and corresponding APRs can be found below:
The vote received support from roughly 74% of the voting power.
The full TIP can be found at the link below: https://forum.switcheo.foundation/topic/46/tip-5-spot-liquidity-pools-reward-weight-change