Polygon Alpha Podcast - Episode 0023 - November 10th, 2022

Mario Zavala - Revert Finance

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Revert Finance

- Time-vested incentives programs for Uniswap v3

- While Uniswap v2 was prime farming land in the summer of 2020, incentivizing liquidity on Uniswap v3 has not yet taken off.

- Revert develops analytics and management tools for liquidity providers in AMM protocols.

- Incentivizing liquidity in Uniswap v3 has not really worked out as well as a lot of us expected.

- The v3staker is a brilliant mechanism, and security-wise it also leaps ahead of what we had in the Uni v2 days.

- Instead of a thousand different forks, one for each farm, we have a canonical contract where any project can create an incentive program and any LP can stake.

- This contract can (and has been) audited, and there is no need to verify each new reward contract individually.

- The problem is that by deploying liquidity in a very narrow price range, a proportionally small amount of capital can capture most of the rewards

- The dominating strategy, as seen in the Ribbon liquidity mining program, is to automate the creation of very narrow positions to maximize rewards capture.

- This leads to mercenary liquidity instead of rewarding long term holders and LPs.

- We think there’s a simple solution to this problem: having a reward vest over a certain period.

- This prevents the ultra-concentrated strategy from being successful as it would quickly go out-of-range and without having vested their rewards

- Revert is going to test this out by incentivizing 8 Uniswap V3 pools on Polygon with 150k MATIC over 28 days, ending on December 21.

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