Liquidity Incentives for axlUSDC-USDT on BNB Chain PancakeSwap

Governance and Grants Community Grants
1
Project Name PancakeSwap
Description Leading multichain DEX on BNB Chain, Ethereum, Polygon zkEVM, zkSync, Arbitrum, and Aptos
Date 16/08/2023
Contact Name Chef Maroon
Discord Username chefmaroon
Grant Amount $40,000

Project Description

We are requesting USD $40,000 worth of AXL tokens over 60-90 days, to incentivize liquidity for the axlUSDC-USDT v3 pair on BNB Chain PancakeSwap.

In our previous round of incentivization with axlUSDC and AXL on BNB Chain, we increased the number of AXL token holders from 1,833 to 3,388, while total transfers of axlUSDC doubled from 127,845 to 256,090. The previous axlUSDC-USDT Stableswap pair (0.04% fee tier) averaged daily volumes of ~$440k while the axlUSDC-USDT v3 pair (0.01% fee tier) is now averaging ~$880k daily volumes. Further incentivization of axlUSDC on PancakeSwap will continue to increase its utilization and market metrics on BNB Chain.

Impact

This grant proposal aims to grow the Axelar ecosystem by:

a) Increasing liquidity: By incentivizing liquidity provision in the axlUSDC-USDT v3 pair, it will reduce slippage and enhance trading volume, making (cross-chain) swaps involving axlUSDC more attractive on BNB Chain.

b) Fostering community engagement: This grant will encourage the PancakeSwap community to explore and partake in the Axelar ecosystem.

c) Amplifying token adoption: By disbursing AXL tokens to CAKE stakers on PancakeSwap, it will drive awareness and adoption of the AXL token on BSC, ultimately contributing to its utility and value.

Grant Details:

a) Grant amount: We are requesting USD $40,000 worth of AXL tokens to be distributed over 60-90 days.

b) Distribution mechanism: The grant will be distributed to our community via a Stake CAKE, Earn AXL Syrup Pool (exact duration will depend on when this proposal is approved).

c) Incentivization mechanism: PancakeSwap will direct at least USD $33,000 of CAKE to the axlUSDC-USDT v3 pair over 90 days by providing a suitable Farm Multiplier.

Goals, Milestones, & KPIs

Primary: Trading volume and TVL of the axlUSDC-USDT v3 pair on BNB Chain PancakeSwap should at least maintain or improve from the current levels.

Secondary: AXL token holder count and axlUSDC transfer count should increase meaningfully from current levels.

Deliverables, Milestones, & Timeline

Day 0 (today): Post governance proposal on Axelar + Start discussions
Day 7: Submit on-chain proposal
Day 8: On-chain proposal ends
Day 9: (If proposal is successful) Axelar team to send the AXL tokens
Day 9: Submit on-chain proposal on PancakeSwap
Day 10: Launch Farm + Syrup Pool on BNB Chain PancakeSwap
Day 86 (10 Nov 2023): Farm + Syrup Pool ends (90 days from end of previous Farm + Syrup Pool)

Risks

PancakeSwap’s Farms and Syrup Pools are smart contracts, which inherently carry smart contract risks. However, this is heavily mitigated by our numerous audits here.

Motivation

As an essential component of the DeFi landscape, PancakeSwap aims to support emerging and established projects by hosting their liquidity and fostering their adoption within the BNB Chain ecosystem. Establishing this Farm + Syrup Pool arrangement also benefits CAKE holders and the broader PancakeSwap community.

Bio & Past Work

1 Like
2

Thank you for your grant proposal.

The previous grant seems to have resulted in 85% AXL token holder growth and 100% increase in axlUSDC transfers which are significant. Interestingly there was also ~100% axlUSDC-USDT daily volume increase.

Assuming that the previous interventions have played a significant role in this growth, we wondered why the primary milestone targets of at least maintaining current levels are so conservative?

We can see where ~ $33,000 dollars of grant are being used, what is the remaining ~ $7,000 used for please?

3

Hey Mike,

We shouldn’t have problems increasing AXL token holder count and axlUSDC transfers as these are cumulative numbers.

On the other hand, as this round of incentives is similar to the previous round, maintaining the current levels of daily volumes would be our base case. Nevertheless, we will do our best in co-marketing to try and outperform the base case, although we also acknowledge that volumes are heavily affected by external factors beyond our control. Cumulatively, the total volumes would definitely increase.

$40k of the AXL incentives will be distributed to CAKE stakers in a Stake CAKE, Earn AXL Syrup Pool. Separately, PancakeSwap will set up a Farm which gives out $33k of CAKE to axlUSDC-USDT LPs (in fact, this is already live). However, we typically extend the Farm beyond the agreement period with our partners, and so will distribute more than $33k of CAKE in the long run.

4

Thanks for the proposal ChefMaroon, we’ve seen BNB and Pancakeswap as one of Squid’s most popular routes, driving tens of thousands of transactions on the network. Fully support!

5

Good proposal! I also have liquidity in PanckeSwap. We will vote for you!