BIP001 to Adjust Liquidity Mining Revenue Allocation Passed

2 min readSep 16, 2021

Proposal:

This is a proposal within Bagels community regarding distributing 85% of MDX mining rewards from Bagels’ LP on MDEX to veBAGEL holders, and the Bagels team keeps the rest 15% for incentive to team and development of Bagels project. This 85/15 scheme will also apply to mining rewards of any future leveraged mining pools whether it rewards MDX or other assets. For example, for all potential mining reward on PANCAKE, the 85/15 scheme will be applied on all CAKE reward.

Reason for the proposal:

Bagels has been under constant attack from Sandwich BOT since the project went live. Specifically, the BOT reaped huge amounts of MDX rewards that was meant for the leveraged mining users by constantly opening and closing large positions on Bagels. This type of hack is both unfair and unavoidable.

Solution:

- Remove MDX reward to leveraged mining users altogether. To compensate for it, BAGEL reward will be increased by 10–30%.

- 85% of the MDX reward will be distributed to veBAGEL holders proportionally via Boardroom.

- 15% of the MDX reward will be kept by the Bagels team for incentive and funding of continuing development of the project.

- 50% of interest income (the difference between lending and borrowing interest of single asset) will be distributed to veBAGEL holders in the form of gBUSD, gMDX, gBTC, gETH, gUSDT, gBNB and gCAKE (when we open CAKE deposit and mining pools).

See chart below for the comparison of the veBAGEL holder return via Boardroom before and after of the above proposed change.

Advantages of BIP001:

- No more hack from Sandwich BOT to unfairly reap the MDX rewards that belong to Bagels users.

- Increased return for veBAGEL holders via Boardroom. This encourages users to lock Bagels for longer tenures to acquire more veBAGEL, and in turn decrease the supply of Bagel in the market which helps stabilise Bagel price.

- Higher Bagel price means higher APY and more TVL.

- Improved incentive for lock up Bagel and use veBAGEL as mining accelerator.