Sustainable Yield and Stable liquidity via Protocol Own Liquidity (POL)

I think saber need to implement Protocol Own Liquidity mechanism to generate sustainable yield and stabilize liquidity. Defi 2.0 is reinventing the way yield is generated and Saber have a super star team to implement POL and be ahead of the curve. I’ll summarize the basic idea here but please see Olympus Dao website for more details on POL at Olympus Pro - Bond marketplace for protocol owned liquidity. since they were one of the first to implement it.

  1. Allow user to buy SBR bonds at below market place using lp tokens from any saber pool
  2. Saber will own the LPs forever and will generate trading fees
  3. Allow user to stake SBR and earn trading fees from the lps that Saber own
  4. SBR can also use the trading fee from the LP to buy back SBR, buy token to inject more into the pools, or yearn yield from other farms.

The net result form all this deeper liquidity pool on SBR and that will always stay there since SBR own the LPs. User will want to buy saber bonds to earn yield, creating higher price of SBR, which will allow for SBR to sell even more bonds and take profits to buy even more LPs or do other things. POL is a value generating machine.

to sell saber bonds and buy lp and stabilize liquidity forever and at the same time be able to give trading rewards and fees back to the token stakers. That is one good way to build value for the token.

10 Likes

Saber can also allow user to buy SBR bonds using SOL or stable coin and build a treasury just like Olympus Dao. The treasury can be injected into the Saber Pool for deeper liquidity and gain even more trading fees. The possibility are endless here.

3 Likes

True this could be really useful for all participants + SOL eco liquidity

1 Like

Clearly a relevant idea for a stable AMM like Saber. For a volatile assets AMM I think the impermanent loss makes the liquidity mining clearly cheapest to attract liquidity (80% of the liquidity providers on Uniswap loose money). However for a stable AMM the bonds scheme can clearly be more capital efficient and make the SBR more sustainable on the long term.

1 Like

I think this is a great idea. I think a 5% discount, and a week’s vesting might be reasonable. We could also offer something steeper, like 15% for 6 months vesting.

If possible, an LBP sort of model, where we start with no discount and offer progressively steeper discounts might be best. That way, Saber gets the best possible price, by going through efficient price discovery.

2 Likes