Gas subsidy incentive to convert to LEB8

Grants / Bounties
1

Title
Incentive in a form of gas subsidy to convert to LEB8.

Why is this important for RP?
There is a lot (~10600) of minipools that have not converted to LEB8 yet. Having them converted would give RP ~40% growth which I consider important for the protocol. Also, recently we see some shortage in minipools - new MPs cannot cover inflows to deposit pool (it is currently ~80% full).

Full Description
I propose to assign a part of pDAO budget to gas subsidies for NOs willing to convert at a discount. Few assorted thoughts on implementation:

  • it can be fair to prioritize small NOs over large;
  • it is possible to have an auction for subsidies to minimize their cost;
  • pDAO should send money to a subsidy winner after a conversion has been done;
  • subsidy program should be short, and have an end date known at the beginning, so that there were no expectations of extension or round 2 (and thus hesitation to convert) after the program concluded. Rather, it has to create a hype and a FOMO.

Estimated cost (denominated in RPL)
If pDAO to subsidize 100% of gas cost it would cost ~40,000 RPL (assessed with 16gwei gas price, not precise). Given there’s an auction and gas subsidy is partial the cost can be reduced 2-5X.

UPD: Actually, it’s rather hard to convert RPL to ETH at current ratio due to low liquidity. So, I think a subsidy can have a different use. Instead of gas, original RPL can be used as an additional collateral. Since LEB8 minipools require more bonded RPL it can be a bottleneck for some NOs.

5 Likes
2

This is an interesting proposal. Personally, I would advise waiting for the validator queue to decrease a bit more before implementing incentives. There’s a fair share of node operators waiting for a shorter validator queue, and compensating their gas expenses might not significantly alter their stance.

With a shorter validator queue and healthier liquidity it could work.

3

It’s true that some NOs are waiting for a shorter queue, though that might be from overestimating the cost of having one LEB8 waiting in the queue and from hoping for a much shorter queue (not guaranteed) compared to the benefit of higher rewards from converting:

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1 Like
4

I would convert more of my 16 pools to 8, the gas fees are not the issue, nor is the queue but the huge amount of extra RPL I would need is.

I’ve borrowed some on Aave to create my existing 8 pools, but I need to put way too much collateral not to have the risk of having a margin call.

Reduced RPL requirements for existing 16 pools to convert to 8 would be a game changer in my view

1 Like
5

I thought of this case. That’s why I updated the proposal (see UPD) so that a subsidy can be in a form of RPL collateral as well.

6

Yes but you can’t just grant RPL to NOs - you won’t have enough for that, plus the incentive is too high to withdraw and sell.
You’d need to lower the requirements or create some borrowing mechanism