HGP-2 [LD] Distribute HBOT via Hummingbot Miner

Author: PHBR0 x58B

Original Post Date: 1 Feb 2022

Snapshot Proposal Link

Category

Liquidity Distributions (LD)

Summary

Distribute 5 million HBOT governance tokens as liquidity mining rewards to Hummingbot Miner liquidity providers during Epoch 1.

Details

Rationale

The HBOT token distribution plan, budgets 15 million tokens for Liquidity Distributions during Epoch 1 for the following purpose:

Since Hummingbot is a decentralized community of liquidity providers that aims to democratize market making, HBOT tokens should be distributed to people who use the Hummingbot software to provide liquidity.

Hummingbot Miner, operated by Hummingbot’s original creator CoinAlpha, is the leading decentralized market making platform in the crypto industry. Every week, it pays out approximately $80k in rewards to thousands of market makers spanning multiple exchanges.

The Miner platform is an important part of the Hummingbot ecosystem, historically being the major driver of Hummingbot usage, community engagement, and source of user feedback and feature development. Miner continues to have the largest concentration of Hummingbot users and community members, and the majority of users of the Hummingbot Miner platform use Hummingbot as their market making software.

Proposal

CoinAlpha believes that Hummingbot Miner provides a fair and transparent medium for HBOT token distribution to Hummingbot users.

We request up to 5 million (33.3%) of the 15 million Epoch 1 Liquidity Distribution allocation, all of which would be distributed to liquidity providers on Hummingbot Miner by June 30, 2022. HBOT token distributions would be made through the ordinary course of Hummingbot Miner weekly reward distributions.

Distribution Mechanics

CoinAlpha would distribute HBOT tokens based on Hummingbot Miner’s methodology for rewarding participants who provide liquidity and create open orders for liquidity mining campaigns that are hosted on the platform. These liquidity mining campaigns are specified by Coinalpha.

The terms of the HBOT token distribution, including amounts and to which campaigns they apply, would be set and can be updated and modified weekly by CoinAlpha.

Distribution Schedule

The distribution would occur over 4-5 months (Feb-Jun) with the goal of distributing the entire 5 million allocation by the end of June 2022.

All the tokens would be distributed to users, and none would be retained by CoinAlpha. If any HBOT tokens remain by the end of June 2022, CoinAlpha would return these tokens back to the Foundation.

Milestones

Distribution start: After this proposal is approved

Distribution end: Until June 30, 2022

Treasury expenses

  • 5 million HBOT tokens sent to CoinAlpha and to be distributed until the end of June 2022.

Author: arti.eth 0x3a7

I would like to know more context around the purpose of this proposal. Specifically, what does the foundation see to gain from distributing tokens (again)? Would it not make sense to also seed a campaign for the HBOT token in addition to this proposal?

My concern is that the liquidity on uniswap will be negatively impacted with this distribution of more tokens.

Author: Lefty 0x9F8

The proposal makes sense to me, but I agree that we should ensure HBOT can be traded with more available liquidity, especially if DAO members should also be rewarded with HBOT as discussed in another proposal.

Author: cgambit 0xdEa

I fully agree & support this proposal as this new distribution method would allow more decentralization in the long term, & incentivizes all miners, as it gives additional rewards to gain. This also means that availability of HBOT

at centralized exchanges would give more exposure, accessibility and price stability.

Relatively speaking, uniswap liquidity is really small that there are wild price swings even at relatively small trades.

Overall, this proposal would bring in more positive impact for all parties and for long term price appreciation / sustainability.

Author: fengtality 0x352

I would like to know more context around the purpose of this proposal. Specifically, what does the foundation see to gain from distributing tokens (again)? Would it not make sense to also seed a campaign for the HBOT token in addition to this proposal? My concern is that the liquidity on uniswap will be negatively impacted with this distribution of more tokens.

Those are fair points. The Foundation created this proposal since we are committed to distributing 90 million tokens during 2022 and believe that the Miner platform is one of the best ways to get them to actual Hummingbot users.

I agree that distributing them to users that provide liquidity or volume to an HBOT exchange-listed trading pair is another great way to do so, while also enabling liquidity for HBOT holders. That’s why this proposal only uses 5m of the 15m Liquidity Distribution budget for Epoch 1, which leaves 10m tokens for other platforms. The Foundation has been approached by many exchanges about listing HBOT, and any of those exchanges is welcome create governance proposals for additional Liquidity Distributions for those pairs.