Description
This proposal focuses on upgrading BabelFish’s Aggregator Smart Contract to enable a Bonus Reward Manager within the BabelFish ecosystem to enhance stablecoin liquidity in the Rootstock blockchain.
Our existing Balancing Curves mechanism represents a significant step forward in improving stablecoin liquidity on Rootstock. However, as our ecosystem continues to evolve, we recognize the need for some adjustments and greater flexibility. Currently, the Balancing Curves Parameters, which are set through the process of community voting in BabelFish’s Bitocracy, may not allow for swift adjustments to cater to the specific needs of promotional campaigns and marketing events.
The Bonus Reward Manager would be used for the purpose of marketing events and campaigns. It could be also used for providing additional incentives for users depositing certain stablecoin into BabelFish aggregator to promote more balanced stablecoin inflows. Rewards for the Bonus Reward Manager would be supplied by other parties, our partners or BabelFish itself. It’s important to note that this upgrade will require an update to the existing Aggregator contract to make the Bonus Reward Manager live.
The second aspect of this proposal focuses on enhancing the Balancing Curves mechanism. Currently, when there is a significant imbalance between the actual stablecoin weights and the target weights, the system also rewards deposits that exceed the target weight of particular stablecoins. To address this, we propose an enhancement that prevents the Reward Manager from providing incentives when supplied stablecoins exceed the predefined Target Weight.
Motivation
The Bonus Reward Manager is designed to complement our established Balancing Curves mechanism. It will provide the agility to independently adjust additional rewards for users, irrespective of the Balancing Curves Parameters. These adjustments can be made for specific periods, to incentivize users providing particular stablecoins to the aggregator, or any other criteria determined by the sponsors or donors of rewards. For these reasons the Bonus Reward Manager will be managed by BabelFish administrators.
The objective of the Balancing Curves adjustment, is to allocate the Reward Manager’s funds more effectively. This change aims to ensure that incentives are directed only towards deposits into the BabelFish aggregator for stablecoins that fall below the specified Target Weight threshold.
In essence, both of these features represent the next evolutionary step in our continuous efforts to strengthen stablecoin liquidity within the BabelFish ecosystem and the Rootstock blockchain.
Implementation
Bonus Reward Manager Smart Contract will be deployed with following parameters:
- Minimum Deposit Threshold - users must deposit a minimum amount of stablecoins to be eligible for bonus rewards.
- Eligible Stablecoin Deposits - users who deposit specified stablecoins into the aggregator become eligible for bonus rewards.
- Bonus Reward Multiplier - the Bonus Reward Manager will send bonus rewards in relation to rewards distributed by the Balancing Curves Reward Manager.
- Pause Feature - protocol administrators can temporarily halt the issuance of Bonus Rewards if necessary. Bonus Rewards would be paused automatically if Balancing Curves Reward + Bonus Reward is greater than the Penalty for the withdrawal of the same amount of stablecoins. Bonus Reward would be paused at a certain timestamp / block.
Aggregator will be updated, so The Bonus Reward Manager could be used.
Updating Balancing Curves Reward Manager with mechanism preventing spending funds for incentives for stablecoin deposits exceeding Target Weights.