[Discussion] REF Base Pair, Smart Routing

Farms
1

Hello friends,

As we recently introduced the Smart Routing Feature I’d like to open a discussion on how this revolutionary feature affects the current way we do farms.

Up until now, users were only able to swap within a specific farm. If there were no pools w available liquidity available, they had to manually make multiple swaps. With the introduction of Smart Routing, the platform will automatically make multiple trades across pools to swap any two tokens (*currently just one jump, more to come).

Proposals for consideration:

  1. make REF the base pair for most pools going forward
  2. Create a ‘second tier’ of ‘smaller/alt’ pools that all have REF as base currency, and a modest % APY (20-30%?). An example of such a pool would be: REF/nUSDO, REF/OIN, REF/META

Benefits:

  • Making REF the base currency of most pools means that any two tokens would always be only one jump away (currently we have REF, NEAR, stNEAR)
  • Increase demand for REF, supporting and increasing price
  • More REF locked
  • Better price discovery. This is particularly important with current assets that only have 1 pool, such as nUSDO, making it really hard for price discovery or arbitrage.

This proposal is a work in progress and would love to see community input. In particular, it’d be great if someone could do some estimates as to how much REF could be locked in these new pools, and how much REF rewards (issuance) would be required to set them up (in my head, the benefits greatly exceed the cost)

AVB

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2

Hey @AVB thank you for sharing your thoughts with us here,

It is indeed essential to have a well connected network of pools to unlock the full potential of smart-routing. The team working on the algorithm have done their research and the results show that, and I quote: “the lower bound that can be traded with a single intermediate hop is >90% of the pools, >80% of the tokens, and >84% of the TVL.”. With 2-hops it’ll covers well over 99% so I don’t think we have a problem here to solve. Creating pools on Ref-finance is permission-less and I’m sure the team will always cater to market demand for new trading pairs.
I also reckon this might help with taking $REF out of circulation, very short term. As soon as farming rewards for these pools end, we’ll end up with an even bigger problem when LPs want to realize their farming gains (original ref amount in the market + farming rewards). The only case where this is viable is when Ref’s cut of trading fees on these pools is more than farming rewards paid to LPs, and we’re a very long way from that.

Again, appreciate you taking the time to share ur thoughts with us and plz feel free to correct me if u think I got smth wrong

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