Experimentally incentivize L2 RAI-”ETH” liquidity during 2(or 4) weeks and see how semi-organic arbitrage demand (= RAI-USD liquidity) grows and how it is sticky.

(This is just pre matured idea. I don’t know if this should be posted to reflexer forum. So I just starts from this blog post.)

Summer of L2s (here I focus on Optimism and Arbitrum) is near us. There is, however, no L2 projects which utilize RAI now. Thus currently not so much RAI liquidity on L2s. Contrarily some say they want to utilize RAI, but the liquidity is too small. It’s chicken-egg problem.

What can reflexer community do about L2 RAI independently on protocol integrations?

(Of course?) except for protocol integrations, remaining way is incentive modification. So, incentivize RAI-USDStableCoin for capital efficiency? In my opinion, this is not good way (for now) hence there is no exact requirement about the amount of liquidity from integration side. The effect of stable-stable pair would be static, unless there is already some demand, and the liquidity would gone away once the incentive is turned off.

I think (full-range) RAI-”ETH” would be better to be incentivized. Hence it brings trading activity (= arbitrage opportunity) through daily ETH volatility. I expect RAI-USD liquidity to “organically” emerge for the trading path of (ETH-RAI)-(RAI-USD) for fee. And I hope the organic RAI-USD liquidity is sticker than the one incentivized directly. I don’t know if this is true but short round experiments like 2(or 4) weeks for Optimism → Arbitrum → … may be worth tested.

• Uni v3

  • Still many people use uni interface for trading rather than aggregators.

  • Fee tiers 0.3% or 0.05%?

    • Full-range fee may be almost nothing. 0.05% may bring more activities through ETH-RAI-USD (0.05% + 0.05% = 0.1% fee at minimum).

  • Fungible tokenization through G-UNI?

    • Possible usecase later?

    • If tokens are fungible, rewards can be detached from mainnet incentive programs.

  • 1.5~2x concentration requirement is another option if the reward calculation is done by off-chain script.

    • Using G-UNI requires fixed range like [$500 equiv. RAI, $10,000 equiv. RAI] (1.9x concentration) for current ETH price of ~$1,800.

• Sushi, Balancer

  • easier interface for LPs.

• Velodrome

  • Will bribing be a thing like CRV/CVX?

  • Personally I don’t like bribing since the bribed FLX may be just sold by people not related to reflexer community.

• Curve v2

  • Some level of auto-managed concentration is possible.

  • v2 factory isn’t available on L2s yet.

Experimentally incentivize L2 RAI-”ETH” liquidity during 2(or 4) weeks and see how semi-organic arbitrage demand (= RAI-USD liquidity) grows and how it is sticky.

(This is just pre matured idea. I don’t know if this should be posted to reflexer forum. So I just starts from this blog post.)

Summer of L2s (here I focus on Optimism and Arbitrum) is near us. There is, however, no L2 projects which utilize RAI now. Thus currently not so much RAI liquidity on L2s. Contrarily some say they want to utilize RAI, but the liquidity is too small. It’s chicken-egg problem.

What can reflexer community do about L2 RAI independently on protocol integrations?

(Of course?) except for protocol integrations, remaining way is incentive modification. So, incentivize RAI-USDStableCoin for capital efficiency? In my opinion, this is not good way (for now) hence there is no exact requirement about the amount of liquidity from integration side. The effect of stable-stable pair would be static, unless there is already some demand, and the liquidity would gone away once the incentive is turned off.

I think (full-range) RAI-”ETH” would be better to be incentivized. Hence it brings trading activity (= arbitrage opportunity) through daily ETH volatility. I expect RAI-USD liquidity to “organically” emerge for the trading path of (ETH-RAI)-(RAI-USD) for fee. And I hope the organic RAI-USD liquidity is sticker than the one incentivized directly. I don’t know if this is true but short round experiments like 2(or 4) weeks for Optimism → Arbitrum → … may be worth tested.

• Uni v3

  • Still many people use uni interface for trading rather than aggregators.

  • Fee tiers 0.3% or 0.05%?

    • Full-range fee may be almost nothing. 0.05% may bring more activities through ETH-RAI-USD (0.05% + 0.05% = 0.1% fee at minimum).

  • Fungible tokenization through G-UNI?

    • Possible usecase later?

    • If tokens are fungible, rewards can be detached from mainnet incentive programs.

  • 1.5~2x concentration requirement is another option if the reward calculation is done by off-chain script.

    • Using G-UNI requires fixed range like [$500 equiv. RAI, $10,000 equiv. RAI] (1.9x concentration) for current ETH price of ~$1,800.

• Sushi, Balancer

  • easier interface for LPs.

• Velodrome

  • Will bribing be a thing like CRV/CVX?

  • Personally I don’t like bribing since the bribed FLX may be just sold by people not related to reflexer community.

• Curve v2

  • Some level of auto-managed concentration is possible.

  • v2 factory isn’t available on L2s yet.