Voting on liquidity mining extension - can we do this soon?

As we know the current liquidity mining program will come to an end ~18th December and will need to be voted for an extension. I’d like to suggest that we make the decision to extend this sooner rather than later to avoid uncertainty.

The way I believe the mining program works at present is that AP accumulated as a function of time with deposits in the mining program, and TORN is funded into the AP/TORN pool linearly until the end date. This means that those that do not claim their AP to TORN quickly enough will be left with an ever increasing AP/TORN rate, causing some game theory on when the best time to withdraw would be. An additional factor is that the AP may only be claimed when the root is updated, pulling that moment forwards a few days more.

Personally I will not feel comfortable leaving significant amounts of ETH in the mining program by the end of October as I expect everyone to be watching the AP/TORN rate as the days become numbered. This is free market stuff, so I’m fine with it, but I believe that if the program is voted to be extended then we can avoid these games entirely.

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I also think that it is necessary to extend the TORN mining program to the next year. But in order to submit a proposal for a vote, you must have 1000 TORN.

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Super interesting! Question: Is a withdrawal counted as a non-anonymous withdrawal if its made to any account that has ever made a deposit or are there criteria around

  • how recently that account deposited OR
  • whether the amount withdrawn is the same amount as the last deposit

Genuinely curious, thanks for providing the insight :pray:

The code matches deposits into a particular pool to withdrawals back to the same address. For example, a deposit to the 100ETH pool on January 1, 2021 from address 0xABC… is matched with a 100ETH withdrawal any time after then back to address 0xABC…

How long it was in the pool doesn’t matter, as long as the withdrawal happens after the deposit.

Total amount deposited or withdrawn isn’t considered-- for example, if address 0xABC made six deposits to the 10ETH pool, and three to the 1ETH pool, then withdrew 22ETH back to address 0xABC and the rest to some other address(es), that would be counted as 4 non-anonymous withdrawals and 5 anonymous withdrawals.

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Torn grew big with AP mining - now it doesn’t need it anymore.

I’ll vote against AP mining, it will only drain the price of TORN further, lets first check what happens when the program is done. I don’t see any benefits anymore.

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That’s awesome. Been trying to recreate this as a Dune dashboard, but running into trouble parsing out all the withdrawal addresses :sweat_smile:.

Is there any chance I could see that script output in csv format @pass123? To figure out what % of each months withdrawals are non-anonymous and plot how that has changed?

You can download CSV data for that chart from here: tornado_withdraw_counts - Google Tabellen

I would consider supporting an extension to the AP mining program at a reduced rate if we could reduce the impact of “non-anon” protocol behaviors (eg, depositing and withdrawing to the same address)

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@ethdev can we add a check in the smart contract that if the designated address for claiming AP has once been used for withdrawal?

if yes, we surface a warning in the UI.

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This wouldn’t be put this in the smart contracts. But this could certainly be done at the UX level.

In fact, right now @unbalancedparen and his team are working on an Anonymity Research Tool called Tutela, which will create an anonymity score for each address based on various “heuristics of protocol misuse,” such as what you described with claiming all AP at once from a single withdrawal address

When this data research and tooling is completed, it could (and likely will) be applied on the front-end to provide warnings to users, such as Warning: this transaction may reduce your anonymity score from 100 to 72

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+1 please extend Anonymity Mining

We need Tornado to be used by more people in the space and rewarding these early adopters is a no brainer

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+1

We definitely want to keep the LPs we have and attract more.

Agreed with the previous message: it’s a no-brainer.

LFG

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Realistically I cannot think of a way to reduce the impact of “non-anon” protocol behaviors through AP mining natively. But it does sound like there is very real sentiment around extending the AP mining rewards at a reduced rate. Maybe we should move the ball forward on this?

Edit: I would actually first like to invite anyone to speak up who strongly opposes this. There’s enough reason not to continue to program, but it doesn’t seem like anyone holding this viewpoint has voiced their concern much yet. Would be good to hear both sides

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Not sure where I recall someone proposing liquidity mining incentives using Uniswap V3 but some events have unfolded regarding a campaign being gamified through a specific strategy coupled with ranged liquidity pricing mechanisms - resulting in over 70% of the rewards going to 14 actors. If any liquidity mining campaign was proposed using the V3 dynamics, I preach that it should be approached with care to avoid any similar occurrences.

Liquidity mining I believe is a sufficient method of distribution that remains relatively equitable for the origin of an asset, to bootstrap the market for economic stability. I do not believe this should be a consistent streamlined incentive for any protocol unless of course, that is the pivot.

I personally think people willfully orchestrate the narrative that impermanent losses are realised, in reality, they are unrealised. There are enough incentives present to commit to being a liquidity provider as is, if however liquidity did get to the point where it became a problem for almost all market actions then I’d contemplate reigniting a campaign.

The TORN/ETH UNIV2 pool has over $2,000,000 in liquidity at the time of writing.

The concerns towards the anonymity mining economics could be addressed if continued, as @ethdev suggested reducing rewards at a reduced rate - and perhaps only reincentivise the most concentrated anonymity sets.

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