Liquidity Incentives on JET

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Hey Team, I was wondering when will lqiuidity incentives be announced for JET?

I know the team is no noob and has thought about Liquidity mining. Point is a lot of users have parked their capital on to JET, instead of other borrowing/lending competitors. However the difference in APYs might be preventing capital inflow into JET.

In fact, I saw this on a telegram group yesterday-

"The real issue though practically is bad incentives. You get 0.08% on deposits from Jet Protocol , while you can stake Solana with 8-10%. In reality , and as the situation stands , you give your SOL or BTC to Jet and what they are doing is to make all the money from staking/farming and give you back a tip for giving them your money. "

Hard-Hitting, but true nonetheless…

Would appreciate some thoughts and discussions in this regards.

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Hi Ezio, thanks for writing. There is currently no yield farming or subsidized rewards program happening on Jet Protocol. We will communicate any incentivized opportunities to the public if we choose to do so. However now, we are not doing so. I also brought up your post about adding USDT to the team, FYI :slight_smile:

A liquidity incentive would likely draw more TVL to Jet, but it could also also be a lot of “mercenary capital” that leaves as soon as the incentives are gone.

We want to drive sustainable growth to Jet and are always open to ideas and discussion - Can you be any more specific in your ideas? I think the challenge is to set reasonable incentives so that we aren’t just increasing token inflation massively and thus hurting everyone except for maybe the largest whales to take advantage of the incentives. We are thinking about this too!

As far as the low rates for lending SOL at the moment, those rates are set by the market. I think that the low rates will increases as we start adding more primary assets to be available as collateral, such as SRM. At the moment a lot of people deposit the most common asset on Solana, SOL, to take out a USDC loan, for example – and this results in low rates for SOL since everyone is depositing it.

We are not taking SOL deposits from Jet and staking them anywhere, so that Telegram message is misguided. But anyone can do so if they wanted to. For example, as I said above, they could take advantage of the low SOL rates you mentioned by depositing BTC, ETH, or USDC and then borrowing SOL and staking that borrowed SOL elsewhere. The rates for borrowing SOL on Jet, as of now, would be very low (just like the deposit rates).

I hope we can hear some more opinions about how to parametrize liquidity incentives in a way that is good for the public, and good for the protocol.

Again, Please be aware of scams, there are currently NO active JET rewards programs and Jet will communicate it clearly if that changes.

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Hey Kevin, I totally get your point. Infact I too detest triple digit unsustainable APYs.

What I suggest is doing something around maybe 8%-15% APY. This is sustainable. Not mercenary distribution, just enough to not let the capital parkers feel that they are not missing out on other promising opportunities.

Maybe you could also add some sort of a vesting mechanism for rewards unlocking(perfectly fine with it)

If we have good liquidity on JET of a number of different assets, we will sort of emerge as the MOST ROBUST bank on Solana (our balance sheet will be healthy). Having liquidity incentives let’s people discover our platform, use it (for the long-term, which I believe is the ultimate goal here).

Apricot finance is launching soon, if they take the crown of DeFi banking on Solana due to their liquidity mining incentives, that would be bad for us, wouldn’t it? (Kinda reminds me of Sushi vampire attack)

Our goal should be to onboard as many users as we possibly can on to JET and make sure, we are the BEST there is out there.

Again, I am not asking for triple digit APY. Just simple 8%-12%-20% APY is pretty good. I am content with it. The inflation won’t be enough to tank the market. It would just make liquidity supplier feel a bit “appreciated” in this environment where there a lot of “opportunities”

Thank you for clarifying on that misguided Telegram post, but yeah, I’d say the man had some solid points in regards to competitiveness of JET with other protocols.

p.s. About USDT, would love it if you could add it a bit earlier because I do require some USD(x) however, I have also supplied USDC to the protocol. I don’t want to take it out. If I could deposit USDC and take USDT loan/vice versa, it would make my life much easier.

Would love to hear your/team’s thoughts on this.

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We get this question a lot and it’s fair - I’d say tl;dr on this is that JET token supply is finite and we want to ensure that every single one that finds a home adds maximum value back to the core protocol.

It’s clear to us that airdrops and retroactive rewards have been thoroughly gamed by sophisticated participants on most of the high profile networks and protocols. We truly dislike the idea of having unfair advantages being had due to information asymmetry.

This is all to say… the JET must flow… and it will. Once we have established an approach or series of approaches to this problem that we believe we can ethically stand behind we will disclose the go-forward plans at the soonest possible date.

Right now our TVL is over $30 Million USD - with zero incentives so far. People can find other yield farming opportunities on other platforms which will yield a net benefit beyond whatever JET’s interest rates offer, but maybe not in the long run?

We started the project in April 2021 - we could have rushed to market much faster but took our time to build something that makes sense for the long-term benefit of the people and businesses that use the protocol. We hope you’ll stick around to see what we have in store :slight_smile:

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I agree with you on pretty much all these points. Perhaps it’s coming across that we’re not thinking about LM programs, or that we’re being too conservative to our detriment, and that may even be correct! I’m glad you’ve brought up the discussion!

I want to iterate that we’re very much R&D’ing our LM program & incentives structure. It takes time to get right, we want the right feedback loops in place to make it sustainable, and we want it to be equitable to all users, not just large whales and funds that can park size and extract a lot of value.

Why are we moving slower? For one, the tech takes time to build and test. We made the conscious and strategic choice to open source our code, so we spend a lot of time making sure we get the code right before releasing. I bring this up because part of our LM strategy is to potentially use it to bootstrap things the protocol needs, with the primary need being an insurance fund, basically a junior tranche in place to protect against adverse events. Second order of importance is having the LM funds to pilot new lending products.

The pooled lending model has gotten DeFi really far, it’s also insanely saturated market on Solana right now, but more importantly it’s evident that users are finding they have nuanced lending needs (NFTs, unsecured, fixed term/rate, and so on…) that are largely unaccounted for across most L1s. And we’re putting a ton of engineering effort into these areas (on the Solana side ofc) with more info coming quite soon.

I’ve diverged a little from the topic, but I think it’s important to highlight as we’ve a holistic view of our LM program. We want there to be utility in place for the tokens our LPs receive before we kick off the program, and we want tokenholders to derive clear benefit from it.

For example, potential options available to LPs claiming their JET rewards:

  • stake accrued rewards for x, y, z benefits,
  • multiply your voting power relative to staking time period selected,
  • stake / deposit and borrow against your JET,
  • and of course, users are naturally free to sell pending an unlock, if there is one

All this introduces optionality, users can structure their token utility on JET in ways that benefits their operational needs best. Lastly, we think this creates a more sticky userbase, and it seems with the competition in the market this is becoming of paramount importance.

To recap, we’re definitely working on our LM program & staking economics, and are designing and implementing the program tech to facilitate it. And I’d like to echo what @jrmoreau said, the JET will flow.

Given all this, would be great to hear your feedback on the specifics I outlined above.

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No!

This is not hard-hitting or true, it’s patently false.

SOL, or any other asset, deposited to Jet remains in the vaults available for other users to borrow. Jet can not, and would not, deploy user funds for its own gains. This information is simply dead wrong.

Furthermore, right now all interest paid by borrowers is passed on to depositors. That means that 100% of protocol revenue is currently given to depositors. The deal is more than fair. If their are better deals out there, that’s fine. We know what bell to ring when it’s time to call them over.

As Wil said, we intend for the DAO to make good use of the ecosystem fund. Rushing to give away network equity in response to misinformation is not a winning strategy. We should act thoughtfully in the best interests of the protocol.

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As someone sitting inside a mature DAO over at Maker, let me say that this will pay dividends later. You don’t need the least engaged users who just want to trade your governance token — you need hordes of small holders who bother to vote and visit your forum. Otherwise you end up having to run down whales just to keep votes functioning.

It is just my personal opinion, but the very users attracted by liquidity rewards are the ones you probably don’t want making up a large voting population in your protocol

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All these are great ideas. I fully back them.

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@adamdelsol elsewhere we were discussing a code of conduct on the forum. I think we should take a pretty hard line against spreading misinformation. Perhaps giving contributors the benefit of the doubt initially, issuing a warning, and then responding more severely to repeated incidents.

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The reason why I’m invested into this project and will continue to revest in is because of the team, their track record, and the long term value the project looks to add to this space. I think the value in the token is that it is NOT given out willy nilly and that creates a level of value not really seen yet in the crypto space. I want the benefits of holding the token to massively outweigh the ease of passively earning the token (i.e. farming and dumping) and I think the strategies we implement moving forward should be based on the size of the community that we create. Holding the token in order to see better interest rates from borrowing and lending is an awesome idea to encourage more holders, and with a great dao we can essentially vote on what the rate of diminishing returns would look like based on the TVL we get up to and number of holders (we don’t want the top 10 addresses getting 90% of the interest benefits).

I’m excited to see what other ideas people come up with in terms of token utility. Im cooking up a few of my own that Ill post once fleshed out.

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