Alternative Idea for Yield Farming: DMG Lockup

I have an idea for yield farming that I believe both meets the long term goal of increasing the supply of m tokens and the short term goal of adding positive price pressure for DMG. My idea is to have the user lock an equivalent value of DMG in a separate smart contract along with the minted uniswap token pair mUSDC/USDC, in order to receive DMG rewards. So for example, you would send $1000 worth of DMG to a smart contract and $1000 worth of mUSDC/USDC lp token to a smart contract, and would recieve DMG rewards based on both these assets being locked. This should reduce the circulating amount of DMG and meet the goal of adding more M tokens to the ecosystem.

I look forward to hearing the feedback of the community on this idea.

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Sounds great lets do it!

I’ll jump in and say I support a straight mUSDC-DMG LP farming for a couple of reasons.

  1. It’s easier to implement as most DeFi projects are currently doing this and code can be reused.
  2. You might not get that much volume on a mUSDC-USDC pairing on Uniswap. A mUSDC-DMG pairing I feel would get more volume while also giving added exposure by seeing “DMG” on the Uniswap token lists. Most people would look at mUSDC-USDC and have no idea it relates to DMG.

The reason for this type of farming would promote minting mTokens and also the need to buy up DMG before participating. The current farming solution promotes selling over holding.

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This sounds like the right thing to do. Also why not mETH-DMG

I agree with your points here. Only downside is exposure to impermanent loss. But actually I think this might be more effective at creating a secondary market for m tokens than my proposal and may be more sustainable. So I would actually consider supporting this over what I proposed. Or alternatively maybe offer both options for rewards: DMG-mUSDC pair and the mUSDC-USDC pair + DMG lockup.

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Can’t we implement both options ?

By locking the tokens, you have the full APR
By depositing tokens that are unlocked, you have less APR but the ability to withdraw at any time

Hey Tai, I like the suggestion but in your idea’s current format it may be a barrier that is too large for entry for people to farm.

Another idea being tossed around is needing a flat amount to farm. For example, 2500 or 5000 DMG as the threshold amount needed to participate. Obviously it doesn’t scale vertically, but it does scale horizontally as more users participate in farming.

What would be your thoughts on this?

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Sounds good to me. I like this idea as it allows broad participation in farming.

DMG should not be locked, let it circulate freely. Part of the excess profits will be allocated to reward holders for long-term participation in ecological governance, and then repurchase and burn tokens on a regular basis.

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