Augmented Finance’s Early Liquidity Mining: Ups & Downs, Lessons Learned, and Plans Ahead

Augmented Finance was launched on 2 October, 2021 with a 3-week Early Liquidity Mining program containing a 115,000 AGF reward pool. One of the requirements for getting rewards was to stake agTokens (interest-bearing tokens). AGF emission started after the end of the Early Liquidity Mining program (end of October 2021). The Early Liquidity Mining program worked out well: $19M of liquidity was provided to the protocol. But not everything went smoothly after that.

Reasons for TVL drop

After the Early Liquidity Mining program there were several issues. Some early liquidity miners withdrew liquidity that led to the TVL decrease:

Issue: The Early Liquidity Mining staking pools design worked well for “retrospective” rewards but didn’t work for per-second rewards distribution after the end of the Early Liquidity Mining program.

Resolution: Friction with re-staking assets from the Early Liquidity Mining pools to the new staking pools frustrated many liquidity providers. We reduced the cooldown for Early Liquidity Mining staking pools to 1 minute to make it easier for our precious early liquidity providers to unstake from old pools and re-stake to new pools. We did the cooldown period reduction later that we could have done, unfortunately.

Issue: Unclear communication regarding the 10-day cooldown period for unstaking agTokens.

Resolution: We made it clear in the interface and reduced the cooldown period to 7 days for all staking pools except AGF-ETH Uni v2 LP. The cooldown for AGF-ETH Uni v2 LP staking pool has been reduced to 1 day.

Issue: Gas estimate issue for claiming AGF token (2–3x larger gas fee estimate for “claim AGF” transaction than it really was).

Resolution: We re-calibrated the tx fees estimator.

Currently all these issues are fixed ✅

Number of holders for AGF tokens

The number of AGF holders as per Etherscan is not fully representative. All the users who staked AGF in protocol and/or added AGF to AGF-ETH pool on Uniswap v2 have not been counted by Etherscan as separate holders (+ ~100 holders).

These 2 contracts represent

It was our deliberate decision to make the AGF token “utility-rich”. It makes it substantially more attractive to stake AGF and/or add AGF to AGF-ETH Uni v2 pool and earn great rewards vs just keep AGF on your wallet without use. This led to a small number of holders who “do nothing” with AGF (i.e. keep AGF on their wallets). The vast majority of users either stake AGF or add it to the AGF-ETH Uni v2 pool to make their AGF work for them.

One more reason why the number of AGF token holders on Etherscan is not representative is that many users have been allocated AGF for their operations (supply/borrow/stake) but haven’t claimed their AGF yet (+ several 100s of holders). Ethereum transaction fees are high. Those users will claim their AGF when Ethereum fees become more reasonable.

The real number of AGF token holders is much larger than shown on Etherscan for now.

The team is working hard to get back on track and grow TVL 📈

  1. The protocol is launching on BCS and other L1/L2 in late 2021 — early 2022. Low tx fees on BSC and other L1/L2 will attract more retail lenders and borrowers. Current Ethereum fees ($100–300/tx) are not suitable for retail lenders/borrowers.
  2. We are working on a number of high-potential partnerships.
  3. Innovations on the product side:
  • Enabling holders of liquid NFT collections to use them as a collateral to borrow other assets
  • NFT fractionalization

Stay tuned for more updates and share our news on social media. It will really help us raise awareness. Thank you!

Augmented is on a mission to build an open, efficient, and globally accessible financial system.