Extend insurance mining (2nd iteration)

This proposal from the DerivaDAO foundation will extend insurance mining again by 3 months. The objective is to reduce churn and associated costs to stakers, and encourage a robust insurance fund as the exchange development approaches readiness for a mainnet proposal.

Strongly disagree with this proposal. The insurance fund is currently being used by whales/VCs to market sell ddx tokens on a regular basis.

Evidence: https://etherscan.io/address/0x09e65bc482dc5feca024b92c0e8d4bb1fa40aa82#tokentxns
If you follow the outgoing transactions, they all go straight to coinbase and a large red candle follows shortly after.
The whale currently has $20MM CUSDC staked in the fund, so they receive approx 30% of all rewards generated, which is immediately moved from their trader wallet to coinbase after claiming. They also appear to hold 0 DDX, which brings into question their long term commitment to derivadex.

I believe this whale is actually CMS Holdings, a VC firm that was an early supporter of Derivadex.

Is there any reason to not wait until mainnet is ready before extending mining? That way the whales taking advantage of the program at least provide some value to the protocol. It currently only serves as a low-risk farming strategy for whales holding stable coins to make free money from DDX holders who earnestly believe in the long term potential of the exchange

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I think as long as we can expect the exchange to launch to mainnet during this window, it’s important to keep the program running. Letting it stop now could result in much (most?) of the liquidity moving elsewhere if stakers don’t expect some incentives to start up. People aren’t going to keep their capital somewhere with no yield.


There’s nothing wrong with the capital moving elsewhere for now. I have high confidence It will come back once mainnet launches.
Also, there is absolutely no guarantee that mainnet launches during this 3 month window, we shouldnt base decisions on speculation. Building a decentralized PERP platform with CEX-like performance takes time.

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Agree with cody–once the exchange is operational there is an incentive for participants to remain in the insurance fund, i.e. liquidations. But prior to launch and without insurance mining, no one can reasonably expect $62m to remain in the pool. I would imagine after launch some but not all may return, it may well get allocated to less liquid alternatives in the meantime with their own respective lockup incentives.

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I just want to leave a note for anyone having trouble connecting their wallet or viewing the governance site to please reach out to me on Discord (Ainsley#5507) or telegram. We’re trying to debug some caching issues with the UI currently.