Summary:

An alternative to Flash liquidity mining program. Allow people to pair their ETH collateral with FLASH (that they don't own), to buy it only using locked time.

 

Problems of flashstake at present:

At the moment large holders of FLASH have difficulty Flashstaking FLASH/ETH pool for long periods of time without experiencing large slippage. This may be holding off newcomers and putting off present investors of the protocol. This and the gas fee problem are the largest factors limiting the FLASH protocol in my opinion.

Another problem is that if someone flashstakes for maximum time today for 50% yield, they don't know if they can do another 50% flashstake at the end of that term to essentially pay off their initial investment in flash for essentially a zero risk investment with a not so well known (not universally trusted, as this is earned with time) Dapp. Flashstake not being so well known and uncertainty with liquidity may be off putting to may large investors.

 

How the alternative to FLASH liquidity mining rewards could work in order to boost FLASH/ETH liquidity of flashstake dapp:

A person who wants to purchase the FLASH with time, deposits only ETH to a smart contract where it is paired with an equivalent $ value of FLASH. The smart contract adds this to the LP pool and the minted LP tokens are then time locked in the AQUAFI protocol for a time 20% greater than the maximum possible flashstake time for a potential flashstaker within the flashstake dapp. 

At the end of the locked period the smart contact withdraws the LP tokens, giving the user back ETH, FLASH, earned LP fees and AQUA reward bonus (impermanent loss will affect returned ETH and FLASH but fees should help counteract that with the AQUA rewards ontop).

 

Where could this FLASH people buy with time come from?

a) The same place the LM rewards came from.

b) From a percentage of the FPY match.

c) Flashstake X% of the community funds for ETH to market buy FLASH which is used to test the demand for such a program.

 

Positives:

•The LP time for this incentive is dynamic following the FPY time for 50% yield. This incentivises people to add liquidity to the when demand for flashstaking has been lower over a period of time (when staked flash in protocol is lower so higher FPY) as the LPer can pays off reward flash over a quicker time frame then when the demand is higher and this helps liquidity of the protocol be increased before protocol demand increases. This greater liquidity should also help increase demand for protocol and there for more flashstakes to be made.

 

•As LP pooling time is max stake time +20% it means that someone flashstaking at the same time for 50% yield, can ensure that they can flashstake again at end of locked period for an additional 50% yield using the liquidity of that LP addition at time of previous flashstake or any LP that added LP at up to 20% lower max duration time frame than when they previously flashstaked.

 

•It allows people to earn liquidity rewards and buy FLASH with only time by the user only providing ETH! Could market this to the whole ETH community. Great for marketing. 

 

•Longer term liquidity incentive for protocol than LM program. 

 

•Any impermenant loss may be reduced with help of earned AQUA rewards, present LM program does not offer this.  

 

Negatives:

•We need FLASH from somewhere for this inventive to work. If taken out of the FPY match I believe it would take along time as flashstake Dapp usage is low at present due to what I believe is lack of liquidity, stuck in a bit of a loop unless flash comes from elsewhere. 

 

•Additional dev time and funding wound be required to develop this solution putting further strain on flash funds. 

 

•TLV of LP tokens used for this incentivise would be secure by the security of AQUAFI smart contract which is an external risk in terms of it being new.

 

Additional information:

I want people to take this more as an initial idea which could be adjusted if people see it necessary so we can all come up with the best possible solution for incentivising liquidity on the platform in a sustainable way.