Aragon – the leading protocol for DAO creation – has joined the yield farming discussion with new liquidity rewards for its native governance token – ANT.
The ANT liquidity rewards program is live! ????
You can now provide ANT liquidity on Uniswap and get rewarded for it ??
The clock for rewards will start ticking tomorrow July 22nd at 3pm UTC. Read more and stake your ANT! ??https://t.co/BghYugOzMV
— Aragon ?? (@AragonProject) July 21, 2020
Aragon’s new liquidity rewards program looks to drive deep liquidity to the ANT/ETH Unsiwap pair – the primary place for DeFi users to get their hands on the asset used to back ecosystem work tokens like ANJ and ANA. Starting today, 50,000 ANT (~$90,000 at current prices) will be distributed as rewards to liquidity providers for the ANT/ETH pool on Uniswap V2. The program will run for 30 days (until August 21st) at which time the initiative will be reassessed for secondary rounds.
In tandem with ANT rewards, Aragon has also launched a liquidity dashboard – allowing participants to easily stake their UNI tokens for a pro-rata claim on the rewards pool. Please note that to partake in the program, your UNI tokens must be staked through the dashboard.
The launch of Unsiwap incentives is set to be the first of a suite of liquidity rewards, possibly including Balancer and Aragon-based products like Aragon Chain and Aragon Court.
“We are huge fans of the concept of liquidity rewards, pioneered by Synthetix and recently very well executed by Balancer.” Aragon CEO Luis Cuende told DeFi Rate. “Historically, ANT hasn’t been the most liquid token, and community members and institutions often complained after unsuccessfully trying to build their positions.”
When asked why now was a good time for incentives, Cuende added that “with the imminent launch of the Aragon Network DAO, a low barrier of entry is key, and a (big) piece of that is deep liquidity.”
To foreshadow some of the more innovative features LP incentives help advocate, Cuende alluded to proof of liquidity tokens, essentially allowing users to both participate in governance while earning a return on liquidity.
Why Should I Care?
What’s interesting to note is that prior to the program being launched, certain orders actually had deeper liquidity on Uniswap V1. With the launch of liquidity rewards, these LPs now have a direct incentive to migrate to Uniswap V2. Plus, less than 24 hours later, the ANT/ETH V2 pair has surged to over $2.3M in liquidity – more than 72% above its pool size prior to launching. This has also spurred nearly $1M in 24h volume, yet another testament to the growth catalyst virtually every project launching a liquidity incentive is experiencing.
Just a day after the announcement, and a few minutes after the rewards clock started ticking, the ANT-ETH pool is the 8th largest on Uniswap ?? https://t.co/O75LgJzcTs pic.twitter.com/9UHocPpifx
— Aragon ?? (@AragonProject) July 22, 2020
As Aragon continues to develop tooling for DAOs, the ANT token is one that carries residual value as the platform continues to grow. While the value capture mechanisms are not the strongest we’ve seen to date, the upcoming launch of Aragon Chain should make that case stronger. To provide a clear picture, work tokens like Aragon Court’s ANJ and Aragon Chain’s ARA are accessed through ANT exchanges. In the case of ARA, tokens can be staked to earn transaction fees paid by Aragon Chain users.
Liquidity Incentives Heat Up
All in all, it’s clear that the Aragon Ecosystem isn’t slowing down anytime soon. The launch of their liquidity rewards come in tandem with projects like Compound, Balancer, Synthetix, Curve, yEarn, Ampleforth, Pillar, Auctus, MCDEX, and Mainframe – all of which are more are now fighting for liquidity amidst the latest yield farming rush.
What’s interesting to consider is whether or not these incentives drive value-added usage of the platform, or if it’s more of a means to a return for eager DeFi traders. Thankfully, Aragon’s intention to introduce proof of liquidity voting gives this program more credence, especially if those liquidity tokens hold more voting power than the average, unstaked virgin ANT.
Regardless, the DeFi ecosystem is driving unique opportunities for all LPs, and with new interfaces like Aragon’s liquidity dashboard – the competition for the best end-to-end LP incentive is heating up by the day.
To stay up with Aragon, follow them on Twitter or join the conversation on Discord.
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Cooper is the Editor of DeFi Rate and a contributor to leading DeFi outlets like the Defiant and Bankless. He is active in the DAO ecosystem through projects like MetaCartel and Raid Guild where he seeks to incubate governance models and grassroots community development. He is an ambassador of Set Protocol and the Director of Fitzner Blockchain Consulting where he authors a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.
