Exploring Rewards for FISH stakers

Staking in the context of BabelFish DAO involves locking up a specific amount of FISH tokens in a smart contract to support operations, particularly in governance participation within the protocol. It is a common practice that, in return, participants, known as stakers, may receive rewards, typically in the form of additional tokens or transaction fees.

Background:

  • Currently, FISH stakers can only participate in governance through the BabelFish Bitocracy.

  • The BabelFish Bridge operates with minimal fee rates to minimize user friction.

  • The BabelFish aggregator, up to the implementation of Balancing Curves, did not enable revenue collection. While positive developments have been observed since the launch of Balancing Curves, with funds flowing into the BC Reward Manager, creating a sustainable revenue source remains a complex task. Despite our achievements, we acknowledge that our desired position has not yet been reached. I believe that directing our efforts towards providing incentives for the Reward Manager is a crucial step before considering the implementation of staking rewards using Balancing Curves. Our focus should be on sustainability, enhancing the liquidity of stablecoins, and optimizing the usability of the BabelFish aggregator.

That is why i think that primary options that we should take under consideration are:

  1. Providing additional FISH tokens

    • Considering the absence of generated revenue, providing extra FISH tokens tied to Voting Power appears reasonable.
    • The longer and more a user stakes, the greater his impact (Voting Power) on the protocol and the reward is.
  2. Use other than Balancing Curves options (until certain milestones are reached) to generate revenue and use those funds to buy-and-burnd FISH tokens.

    • Exploring new small fees, such as those dedicated to RSK stablecoins, or direct swaps between aggregated stablecoins (1 click swaps, without needing to go to XUSD - currently under development)
    • Generating revenue by lending DLLR and rUSDT on Sovryn is another potential avenue.

This is just a start of the discussion. There are some challenges ahead, but ultimately - we have to find optimal solution together. Please share your thoughts and ideas.

The other part of this conversation should be about rewarding our long term devoted stakers. Perhaps, once the basic principles are decided, we can turn our attention to acknowledging and appreciating those who have been with us on this journey.

First of all, it is worth noting that it is pleasing to see that babelfish is continuously making strides towards improving its own technology and system operations.

Without increasing the value of the platform and babelfish itself, launching rewards in babelfish tokens will simply kill the price of babelfish, as it will be mercilessly fixed in USD tokens due to current liquidity. Therefore, to begin rewarding staking users, it is necessary to maximize the profitability of the platform itself. If you want to reward users in babelfish tokens, there must be a huge number of people willing to buy this token. Otherwise, with the current liquidity, the token, which is already below its private sale values, will drop even further and drive away all current users and staking users, losing interest from anyone since the project cannot maintain its value.

The second option is, of course, to reward in USD tokens, but again, the platform must generate additional profits to have enough money for rewards, advertising, and future development.

It all comes down to increasing the number of platform users, marketing campaigns, and so on.

The plan I propose is as follows:

  1. Increase the significance of staking - give users the ability to show their ranking to the platform itself - this can be done through NFTs or through recognition implementation within the platform. Specifically:
    a) users with a large amount of babelfish in staking receive the lowest conversion rate (or pay no platform fees at all);
    b) users with a large amount of babelfish in staking can receive the highest reward (e.g., 10% and users without coins in staking cannot claim rewards higher than 5%).
    с) Based on the above, it is also possible to add a reduction of the exchange penalty if the exchange is made by a user with a staking balance.
    Thus, we raise the significance of platform users themselves, the interest in the token, and the number of operations on the network. If we are talking about implementing a system, such as NFT, then its points can include:
  2. Staking babelfish;
  3. Exchange volumes on the platform itself;
  4. Participation in voting;
  5. Time of existence and participation in the babelfish ecosystem.

Such ratings, in essence, are competitions and incentives that increase interest and keep users attached to the platform because they enjoy working in such conditions and where their actions and expenses on commissions are rewarded.

When the system is fully developed, we can take the step I described earlier in another section of the forum.
" I have analyzed the latest trends and strategies that are currently effective in attracting funds and people to projects. Here are my suggestions:

  1. It is necessary to introduce an airdrop among community members for specific actions.
  2. Show that these actions will earn points that will be converted into tickets, such as lottery tickets or real currency, in the future.
  3. Set tasks and quests on platforms such as zealy.io, galxe.com, layer3.xyz, guild.xyz.

The tasks will primarily involve actions like reposts from babelfish’s Twitter account, subscriptions, comments, and highlighting friends on the most interesting posts. Initially, these could be announcements about the upcoming period when project participants can show their activity and be rewarded for it in the future. In the second stage, there will be introductory fragments about the platform - these will be more emotional and intriguing videos that talk about the profitability of staking, future airdrops for active participants, and the widespread use of the platform in the future. The message will also highlight that full decentralization will provide maximum profit to babelfish community members, not only those who have left their coins in staking but also those who hold coins and will soon benefit from the platform’s maximum adaptation and expansion with the implementation of new networks and possibilities.

It is crucial that this advertising campaign and future airdrops are implemented first on DEX and then on CEX - without this, the reaction from both old and new communities will be negative, leading to the project’s ultimate demise. In terms of airdrops, I suggest including other projects to reach a wider audience and increase trust levels - for example, wallets that can advertise the airdrop themselves. It would also be great if exchanges could add the possibility of dropping staking rewards for a particular currency, as done on Binance Launchpool. Alternatively, if possible, staking babelfish itself could be introduced, with a high APY offered initially, which can also be advertised via email to potential interested people willing to participate. In the future, giveaways can be added between stakers - i.e., people who hold their babelfish coins in staking until, for example, May 20, 2025, have a chance to win a 200% API or $10,000.

All of this must be advertised through reposts, comments, etc. on Twitter, other social media platforms, and cool platforms. This way, the project will truly come to life and bring profits to all participants. I suggest planning this advertising campaign for six months to a year. It is essential that each action is intriguing and motivates users to keep their money in the project or conduct transactions and exchanges.

Finally, by collaborating with some platforms like SOV, it may be possible to award beautiful NFT rewards for a certain number of points or completing certain tasks. Every ten days, cash prizes or bonuses that will count towards airdrops can be awarded for the best meme, the best advertising slogan, or the most people referred through a link. These will all be new and exciting NFTs that cryptocurrency users love.
It would also be possible to release a series of NFTs - several projects currently use this method with the possibility of a future airdrop. This series should be conditionally free, but to receive such an NFT, the user will need to pay a small conditional commission, for example, 0.000777 ETH, and this will bring money to the babelfish project, which it can use in the future for prize draws and increased API, which babelfish can use to increase liquidity and for advertising. These are the funds that will inspire every member of babelfish to work, and inspire every participant to contribute to the project. And, of course, these NFTs will then need to be used as amplifiers of the received airdrop.

You mentioned the lottery that inspired you - make it public, make it so that the whole project is heard about, make it so that babelfish enters history and becomes known to every third person in the world. Make it so that not two or five people win, but the entire babelfish community wins. So that victory is achieved by those who have recently joined the project and those who have been with the project for a long time! Make it so that we know that we are supporting and supported the right project, which has confirmed its name, confirmed the fact that we were not mistaken and it is the one that changed our destinies.

  1. Listed by points:
    A) Articles about the project’s current work and future developments and plans (e.g. updating the roadmap).
    B) Short videos (1-2 minutes) showcasing the platform’s ease of use, updated plans, and advantages. It is important to highlight the features, benefits, and advantages for the platform’s visitors. Contests for attractive videos demonstrating the platform’s simplicity can also be organized. Mini-instructions on how to use babelfish and arbitrage cryptocurrency are also relevant. Videos explaining the importance of balancing curves are necessary.
  2. Information about upcoming airdrops will be posted, which will depend on each individual user’s activity and points earned on platforms such as galxe.com, zealy, guild, layer3, etc. Posts will also be made on airdrop websites such as airdrops.io, airdropalert.com, airdropking.io, etc.
  3. Twice a week, simple tasks will be posted that do not require any special skills (e.g. transactions, volume, staking). Once a week, a video instruction will be posted along with a task related to that topic or instruction. A monthly or bi-weekly contest for memes or videos about babelfish can be organized, judged based on dynamics, graphics, and plot.
  4. Other tasks include:
    A) Repost tasks
    B) Repost tasks with comments mentioning friends (a separate section can be created for the number of invited users)
    C) Tasks for users to understand the platform better

Conclusion: By performing these tasks and activities consistently for several months, more people will learn about the platform and volumes will increase, providing users with money and increasing the project’s budget. In general, the project will start working instead of languishing.
It is possible to offer prizes in XUSD (or other stablecoins), prizes for increased staking rates, and prizes in NFTs that grant the right to use the platform for one, three, or twelve months without paying bridge fees or penalties."

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Continuing our conversation, what is the reward for investors who have been in a significant loss for several years? What kind of reward will not harm the project?

Although the question is about money, the main concern is how to ensure that these funds do not harm the system. First and foremost, as I mentioned earlier, we need to create demand for the Babelfish token. I believe that its value can be increased through rewards and reduced fees, especially for staking users.

The question now is how to increase its significance even further, so that the project not only breaks even but also generates significant profits that can be distributed among all staking or Babelfish holders. I think we should promote the platform through a large contest with hidden selection criteria, similar to an airdrop.

Another softer and more prolonged approach is through development. However, we need to understand who should be the primary user of the platform. I believe that private users in the early stages are not feasible until the platform gains more traction. Instead, we should focus on users who earn through cryptocurrency arbitrage, helping their clients obtain certain tokens, possibly through cash or private transfers. We need to create ideal conditions for them to earn, perhaps even within the platform itself - let them trade and receive rewards from the reward manager! We need to start by promoting awareness of how to actively earn on the Babelfish aggregator through social media, but it is essential to ensure that those who invest the most in Babelfish staking receive a more profit than simular user.

As advertising and users increase, they will need more networks to use. Currently, very few networks are involved in Babelfish’s operations, and there are no networks that many people use. For example, currently, high volumes are shown by networks such as zksync, Avalanche, optimism, opbnb, Arbitrum, and other promising and established networks. Through increasing the number of such networks in Babelfish, along with rewarding those who hold coins in staking, the platform can compete with powerful decentralized and centralized exchanges and bridges.

Regarding rewards, when Babelfish becomes highly profitable, I think the best approach is to start buying back its own token. Yes, that’s right. I believe that we need to first fix a high price for Babelfish and demonstrate its significance (if this does not happen during the operation itself when many networks are involved in Babelfish’s operations and actions and videos are made to teach users how to earn on the platform). In essence, I am saying that both users and the system should benefit from this.

If there is a lot of profit in the platform when 10 or 15 networks are added, two actions can be taken that will not harm the system: 1. Increase the yield percentage for staking Babelfish to 50% of profits for all staking Babelfish holders. And secondly, distribute additional Babelfish tokens to all old Babelfish holders (it is essential to note that there should be no token blocking at this point since investors have long held their tokens in staking and have not received any profit!). At this point, it is crucial that the volume distributed is proportional not to Babelfish but to invested funds, as this condition will also please those who bought Babelfish at a very high rate than it is now.

Lastly, I have a question: if we are helping people, why not put the system’s tokens to work? I mean only one token - a key token like Eth or BNB. After all, if we make a mistake and transfer it to a network where there is no key token, we will have to find where to buy it.

These are all my thoughts. I do not know the possibilities of the Babelfish team or the reality of their conditions and desires. I hope the project does not stagnate.

Here are the main competing projects, in my opinion, that offer users an extensive list of possibilities: bungee.exchange, stargate.finance, rhino.fi. They already have a large number of networks and possibilities for users. They do not have what Babelfish has, but they capture large volumes in the market, killing opportunities for Babelfish growth. Therefore, it is essential to accelerate the implementation of various networks in Babelfish, and if these are new networks, I think we should also implement their key token. For example, Songbird - the SGB token. And I believe that the new networks themselves will be ready to integrate Babelfish into themselves and participate in providing their tokens with liquidity or money in the reward manager.

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I can see a clear development plan for the babelfish system:

  1. Adding new systems gradually, but on a larger scale than before.
  2. Considering the possibility of direct exchange (1/1) of key network tokens like Eth or rBtc.
  3. Decreasing rewards for users without babelfish in staking.
  4. Increasing rewards proportionally to the rating based on the number of babelfish in staking.
  5. Distributing airdrops at the peak of babelfish activity and profitability.

Not sure if I got it right - could You rephrase it?

You mean exchange of gas tokens?

Yes. Only gas tokens.

Stakers should get a share of the fees from stablecoin activity on the protocol. A set fee that grows with protocol activity. Yes, it may be little for now, but any activity generates more staking, meaning more eyeballs on Babelfish and $XUSD, consequently more stables being bridged in to buy $FISH - and balancing curves see more usage. Basically a positive feedback loop.

Drawing from Sovryn, there was a period where fees from total protocol activity were little, even getting to just 2% APY, but that created a floor for the $SOV price and supported the protocol through the bear market as stakers still had reason to dollar cost average and build their position. And they have benefitted from the capital gains that have followed.

$FISH token rewards should be subject to a lockup period and slow release schedule, again like the SIP 24 rewards from Sovryn. This incentivizes participation, and the stakers with ‘more skin in the game’ get more rewards - and they are more likely to add to their stake than dump on the open market. Again, this was already seen with Sovryn’s max stakers, who used their SIP 24 rewards to build their stakes. Yes, there are those who will sell, but the overall effect will be more $FISH being held by long-term stakers who want to see the Babelfish succeed - and that’s a net positive.

I use Sovryn as an example since the protocols operate in the same ecosystem.
So a mix of rewards from:

  1. Fees from Babelfish stablecoin activity,
  2. $FISH tokens with a lockup+slow release period.

It has already been proven to work on Sovryn.

Thank you for your insights - it seems we’re on the same wavelength. I’ve been delving into the nuances of staking rewards and the paramount importance of sustainable revenue. Through the implementation of balancing curves, we’re venturing into a realm where this sustainability becomes attainable.

Here’s an idea I am contemplating for a while: a modest fee added to the existing Balancing Curves penalties (imbalance fee) for transactions incurring penalties. For instance, when a withdrawal causes a stablecoin’s Target Weight to dip below a predetermined threshold, a penalty (referred to as a conversion fee on our platform) is levied. The gap between Balancing Curves penalties and rewards is minimal. The addition of a small fee would result in greater difference between rewards and penalties. Drawing from Sovryn’s model, which applies a 0.35% fee for their AMM, we could adopt a similar approach.

Consider a scenario where moving stablecoins to ETH or BSC incurs a 1% Balancing Curves fee. Adding an additional 0.35% fee would result in a total fee of 1.35%, with 1% directed to the Balancing Curves Reward Manager and the remaining 0.35% to a separate smart contract. This contract would then be responsible for distributing rewards to stakers or managing another mechanism through which stakers could claim their rewards.

Regarding 1 we need to establish the reward magnitude for maximum staking duration. If, hypothetically, someone stakes 100 FISH for three years (max staking duration), an annual reward rate of 3% - totaling 9% over the period - seems reasonable. Another aspect to consider is whether to implement a cliff and vesting schedule for these staking rewards. Incorporating such mechanisms can further align stakers’ interests with the long-term success of the protocol. Assuming we reach a consensus that these rewards should also be eligible to earn a portion of the fees collected in XUSD, the introduction of a 1-year cliff, followed by 24 months of linear vesting, could represent a balanced approach.

What we are also considering is the introduction of swap fees for direct swaps between aggregated stablecoins, eliminating the need for users to convert through XUSD directly. It’s a bit more complex with the Balancing Curves in place, but certainly within our reach. It could introduce an alternative revenue stream, which could be used to directly benefit stakers, but I’m considering its application towards FISH buybacks and burning. This strategy would not only generate revenue but also enhance ecosystem value by reducing the circulating supply of FISH.

The main challenge we face, derived from our use of a fork of Sovryn Bitocracy, is the inefficiency in reward distribution. Sovryn is also grappling with this issue. But I think that it shouldn’t deter us from initiating revenue collection and subsequently refining its distribution process. From the protocol perspective, user-claimed rewards stand out as the most efficient method, avoiding the less economical alternative of airdropping rewards directly to stakers’ wallets. If we would like to perform reward airdrops to multiple wallets, we would need to reserve portion of the rewards for the transfer fees. I think we could consider this idea, with the advent of BitcoinOS, as we anticipate cost efficiency improvements in this area.

I’d love to hear opinions on these ideas. Your input can make a big difference in shaping our future steps.

I think that a set % for every transaction on Babelfish should go to stakers.
maybe something like 0.25% would be fine.

Next to that, I also would like to see unstaking penalties going to stakers or being burned. one of the 2 is fine by me.

Staking rewards in $FISH could work, but I’m afraid for flooding the market with new $FISH while there is not much demand for it. So I would not be in favor of this, even when I’m a staker myself.

There is not that much available on the open market, and i think this is a good thing.
Let’s not flood the market.

It would be great if we can pay stakers with stablecoins instead of $FISH.

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I would go only for penalized transactions - reason is to bring as much liquidity as possible, so less friction is better. Or only for bridging out transactions.

That’s why liquid $FISH is not an option, that I would take into consideration.

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Taking a look at the recent growth numbers https://babelfish-money.medium.com/babelfish-insights-reflecting-on-recent-growth-mid-february-mid-march-9238b076107a,

would there be any chance in providing staking rewards if Babelfish is able to keep this kind of volume monthly?

How much did the project make from this last month? is Babelfish profitable with these kind of numbers? does it break even? still in a loss? and if so, how much more of volume is needed to become profitable?

$8m in volume, what does it means for revenue?

trying to wrap my head around these kind of numbers.

@Hyde see above. you might have missed it

We would need to see if this is sutainable for a bit longer timeframe. But what I personally think is adding small fee to Balancing Curves - like 0.25% which would be collected only for the purpose of Staking Rewards. This would result in every transaction being penalized. Although - we could take different approach and add this fee only for transactions that bring the aggregator out of ballance.

1,171.69 XUSD - although I would not say that project earned anything. Rather that we were able to collect more fees which are used as incentives to bridge stablecoins to the system.

I didn’t work on estimates - it is hard to predict something. I will try to wrap my head around it when I will have some more time.

$8m of volume in the aggregator resulted in 40,499.42 XUSD volume in the Reward Manager. That’s ~0.5% of the aggregator volume, which resulted in ~1,171.69 more penalties collected. We could estimate something from here. I didn’t work on estimates yet - it is hard to predict something with so many moving pieces. I will try to wrap my head around it when I will have some more time.

Thank you for your reply.
I would say there should become some kind of fee to ‘earn more’ for the project itself.

I will wait for your further updates on this. seems more than reasonable to bring a bit less to the reward manager and maybe give stakers a small portion from those fees.

And there should also be more fees flowing to Babelfish itself, so it can become sustainable and Devs and what else more can be paid from the fees.

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