#FarmRevolution: Introducing Dimension Pools
This article is part of the #FarmRevolution series where we talk about what Timeleap does differently and why.
Why do we not do the standard dividend pool / pool exchange?
There’s usually a high demand by yield farming communities for partnerships, and typical partnerships involve a dividend pool or pool exchange.
For those who are new to yield farming, a dividend pool would mean that we provide a partner with X amount of our native token, TIME. The partner would then create a pool whereby investors can stake their native token to earn TIME.
A pool exchange is similar, just that it goes both ways. So:
- Stake partner’s native token to earn TIME on partner’s site
- Stake our native (TIME) to earn partner’s native token on our site
We’ve had farms asking for anywhere between $2,500 to $50,000 in terms of native tokens, for varying durations that last anywhere from 1 week to 3 months. The main benefit that comes out of this expenditure would be marketing exposure, and can be in the form of a:
- Telegram shoutout
- Medium write-up
- AMA in the partner’s Telegram
Ultimately, participating in such a partnership means that you’re hoping that a partner farm’s holders will be interested to stake in your farm and increase your holder count.
We’ve been extremely selective in terms of such partnerships. Here’s why:
- Our farm does not allow for a pool exchange. We deliberately removed the code for it for reasons that are further elaborated later on in this article. This means that we can only participate in a partner’s dividend pool (paying them in TIME), but the partner will not be able to participate in ours (paying us in their native). This leads us to the next point.
- It is very easy for farms to run out of marketing budget. Ads and partnerships do not come cheap, especially if the farm has a low max supply. For us, TIME has a max supply of 86,400, which means that there comes a point in time when native tokens are no longer minted — and native tokens are what is requested for by a partnering farm.
- Tons of farms fail within their first week or month. Whether it’s a hard/soft rug, an incompetent team, bad tokenomics, or poor community management. Partnering with a farm that fails just isn’t great for PR.
- Metrics such as Twitter followers and Telegram members are often used as bargaining chips to convince that the marketing expenditure is worth it — but those who’ve been in this scene for a while all know that Twitter followers and Telegram members can easily be “bought” through giveaways or member adding services.
- On top of that, if a farm has limited marketing resources, we’re not going to be getting bang for buck spent.
Dissecting the Dividend Pool feature
There are many reasons why a farm would want to host a dividend pool. The main benefit can be summed up with “holder retention” — when holders stake native tokens to earn dividend tokens, it helps to prevent the selling of native tokens.
But hey, dividend pools can’t please every native holder. Let’s look at how the dividend pool approach affects holder retention:
- The dividend pool token is not of interest / utility to the holder
- The dividend pool provides too low of an APR as too little rewards are being allocated
- The dividend pool token is just dumping too much to provide sufficient ROI for the initial amount of native deposited
With so many factors that could potentially render the initial intent of dividend pools useless, there must be a better way to enhance holder retention while using the same concept.
Introducing Dimension Pools
Why stake LP tokens instead of single tokens?
A rather crucial metric that promotes holder retention is total liquidity.
With higher liquidity, investors are more confident with holding the native token because they can easily enter into / exit from their native token investment — this means that just by ensuring a high liquidity, it automatically encourages holder retention.
Once the native token stops minting, holders are no longer as incentivized to hold native liquidity as there will no longer be any LP farming (that’s when farms typically move on to the next layer — which we’re not going to). This means that the main utility is just to earn rewards from dividend pools by staking the native tokens.
Holding native tokens does not increase liquidity. Furthermore, the reduced liquidity due to the end of LP farming kills investor confidence, hence causing native token dumps and FUD.
So, instead of staking TIME to earn dividend pool rewards, we’re building the feature for investors to stake LPs to earn dividend rewards. We’ll also be adding some nifty features that will solve the challenges stated above for dividend pools.
What are Dimension Pools?
Dimension Pools are almost similar to a Syrup pool, where users typically stake natives to earn partner tokens.
But that’s just one-dimensional utility so we will be adding some innovative twists to it. We’ve already mentioned that our Dimension pools are powered by LP tokens, so read on to find out more about what we intend to build.
Each Dimension pool will have a minimum duration of 1 week, and it will tackle 3 main problems that we’ve personally faced as yield farmers (as mentioned above).
1. The dividend pool token is not of interest / utility to yield farmers
2. The dividend pool provides too low of an APR as too little rewards are being allocated
3. The dividend pool token is just dumping too much to provide sufficient ROI for the initial amount of native deposited
That’s why we’re creating something that’s never seen before in the DeFi space. We’re going to allow you to stake TIME LPs and:
- Auto-compound them! (version 1 release) OR;
- Harvest your share of partner tokens you’ve earned (version 2 release)
The only difference between (1) and (2) would be that harvesting in partner tokens would incur a 10% harvest tax on the amount that you’ve decided to harvest — this harvest tax is split into the following:
- 5% TIME buybacks to be transferred to Masterchef
- 2.5% TIME buybacks to be transferred to TIME Treasury
- 2.5% converted to MATIC and sent to our fee address for further development of innovative features that we’re building in this space
With the above, we’re solving all the major challenges for yield farmers:
- You no longer need to choose which dividend pool to participate because you can still auto-compound for more TIME LPs
- You can also earn our partner’s tokens directly, if you’re interested to ape into our partner’s project or stake in a partnering Dimension Pool
On top of which, staking TIME LPs in our Dimension pools instead of just TIME alone would help to:
- Deepen TIME liquidity so as to further minimize slippage (lowers price impact for new investors to enter)
- Contribute further to our Buyback-and-Make model by resupplying even more TIME to our MasterChef (single-layered farming continues forever with no hyperinflation!)
- Lock away TIME in our timelocked TIME treasury, hence contributing to future utility for TIME while reducing circulating supply (decreases TIME supply, increases TIME price, all without burns!)
Taking it even further with Wormholes
Love how quickly you can enter and exit from a wormhole?
Well, we’re pleased to let you know that after a successful run for the first 4 wormholes, we’ll be upgrading the rest of our features to support similar functionalities.
Once again, we’re doing something completely different from the norm because we want to create the private DeFi bank you’ll wish to come back to.
We want you to bank in TIME, because it’s the ultimate currency.
This is only the beginning of the #FarmRevolution that we’re creating, stick around and you’re gonna enjoy being a TIME holder!