Pickle Finance is extremely weak on Polygon and Arbitrum

To preface I will start with why PICKLE is strong on Ethereum in order to set the stage for why it is so weak on Polygon and Arbitrum.

Pickle Finance has very strong mechanics that capture liquidity and incentivize users to stay in the ecosystem as well as increase their position over time via the DILL mechanism. Any user can choose to participate in Pickle Finance without even knowing what DILL is, but the moment a user has DILL he gains a great deal of advantage over non-DILL user. Aside from voting rights on proposals, DILL holders also increase their rewards on farms outright (the primary reason for anyone to use Pickle Finance in the first place is yield/rewards) and also get revenue share from the platform. As such, while a non-DILL user may find it profitable to use Pickle Finance because of its auto compounding services saving them on gas fees, a DILL user will find themselves swimming in far more PICKLEs and thus far more $.

In order to obtain DILL, a user must first obtain PICKLE, which means either buying it or by providing assets to Jars to be able to farm it. The first scenario increases the value of PICKLE (buy pressure), the latter increases the total revenue of the platform (which also happens to increase buy pressure due to revenue being distributed in PICKLE). Both of these increase the attractiveness of TVL to Pickle Finance because a more valuable PICKLE means more profitable farms and higher revenue means greater reason to want DILL. Not only does locking more PICKLE increase DILL, but so does increasing the lock time. So in order to get the most DILL, a user must both/either commit the most value (PICKLE) and/or time (lock time) to the platform if he wishes to reap the greatest rewards. While these mechanics increase the value of PICKLE / DILL and/or revenue that’s not what I see as most important. Rather, the important thing is that the moment a user has DILL, they are greatly incentivized to remain in the ecosystem. Once you have DILL you open up access to greater rewards and as such are far less likely to find a better place to take your assets. Furthermore, leaving Pickle Finance while you hold DILL is like leaving free money (bonus PICKLE) on the table that you could be making in Farms. While nobody is forced to keep their assets in Pickle Finance once they have DILL, nor is anyone forced to have DILL to make farming “worth it”, the system serves as an extremely powerful way to not only draw in users and their assets, but also encourage them to stick around.

So why is Pickle Finance so lackluster on Polygon and Arbitrum? There is simply no system such as DILL in place on either one. There is no reason to obtain PICKLE other than to build an LP position and there are zero incentives in place for users to remain in the ecosystem. If a user has no intent to bridge farmed PICKLE back to Ethereum, then there is ultimately only one thing for them to do with it: sell it. The PICKLE token becomes nothing but fodder for farmers and something that is just sold for greater yield. This does absolutely nothing positive for Pickle Finance and actually degrades the attractiveness of the platform in general because sell pressure on PICKLE means a less valuable PICKLE and thus less value returned via farms. The only thing encouraging users to utilize Pickle Finance on Polygon or Arbitrum is the amount of PICKLEs we are willing to print and their market value (value which is hurt by sell pressure on these chains) in order to attract liquidity. Furthermore, which is extremely important to note, is that automatic yield farming is far, far less useful on Arbitrum and especially on Polygon. While the gas fees on Ethereum mean that socializing the gas costs for everyone can mean much much higher gains for the individual over time, the gas costs on Polygon especially are so trivial that a user doesn’t really save any money by using Pickle Finance rather than compounding on their own. At best, Pickle Finance serves as a tool for people who are very lazy and would benefit from frequent compounding. But outside of these lazy farmers, if the value of PICKLE or the amount of PICKLEs we are willing to print drops, then nobody is going to want to subject themselves to a 20% performance fee for something they could do themselves for $0.01 of transaction fees.

It is my opinion that until DILL is expanded to affect sidechains/L2s then Pickle Finance is at best unimpressive and at worst pointless for most users anywhere other than on Ethereum.

I have not ventured in Arbitrum yet but I am very familiar with Polygon. There are several platforms that offer DILL-like mechanics which increase rewards for users who commit to and stay in the ecosystem. There are also several platforms which have extremely low performance fees (as low as 1%). If a user wants to truly be a yield farmer they have three options. Take their assets to an ecosystem that offers greater rewards for staying there, to a platform that has extremely low fees and offers pure yield, or go to Pickle Finance and hope that the value of PICKLE stays high enough so that they can just sell it off in order to make sure that having their assets there is worth it.

A final thought in regard to this is that we made the decision to triple PICKLE emissions in order to draw TVL to new chains. As I have explained, attractiveness of Pickle Finance on these chains is almost 100% dependent on the value/amount of PICKLE being distributed to their farms. If emissions return to normal there will be 1/3 the reason to use Pickle Finance on these chains. With this, and the fact that the value of PICKLE has continued to decline over time (high inflation can do that, you know), I find it unlikely that we will ultimately be able to attract much value/users to side chains.

I know that “DILL on sidechains” is SOON™, but imo we have already lost the opportunity to capture quite a lot of TVL that has instead wound up committed to ecosystems that already have such systems in place and we will continue to miss out on these users and revenue the longer we keep putting it off. Instead of having first mover advantage we now have no advantage and the longer we wait the further far behind we will fall.

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Totally agreed.
The expansion to Arbi and Poly contributed towards DILL becoming a largely useless farm and dump governance token.

I disagree with core team’s decision to decide about the emissions themselves and leave the DILL holders out of that decision making.

DILL needs to get more utility. Ideally very soon. The expected date for the new DILL contract rollout has not been communicated. Anyway, it would be likely inaccurate.

I think that in the interim, DILL holders need to have a say about the Polygon and Arbitrum farm rewards. I think that the emissions to other chains need to be significantly reduced till DILL gets some utility in getting boosts and governing that emissions.

Otherwise, DILL holders are sponsoring a farm and dump on other chains.

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This is very well put. It’s something I haven’t thought about in too much detail before. I for one was pushing for the expansion to Arbitrum, but you are right that Pickle Finance becomes less useful with the lower gas costs. I do think this underplays how lazy people are though.

I agree with your thesis. It would be great to get a timeline on when DILL would be available across chain. DILL is what got me down the Pickle Finance rabbit hole and it brings a lot of stickiness and utility that would help continue the protocols growth.

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We have copied an extremely successful veCRV token model and somehow turned it into a “useless governance token nr 85316”

The core team has taken control of 44% of $PICKLE emissions and there are very few reasons to be excited about owning DILL.
The DILL holders could potentially vote for Poly/Arbi pools composition patterns on snapshot. Unfortunately, it’s not for the DILL holders to decide.

I would like to use my DILL to reduce excessive rewards to Polygon, but I can’t.

Meanwhile, the DILL value keeps getting inflated away with large emissions.

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Since apparently we’ll never have DILL on any chain other than Ethereum perhaps we could consider something new. Pickle Finance lives and dies on how much TVL it can lock in and as such we need to come up with mechanisms that not only encourages users to utilize us but also rewards them for giving us more TVL and/or for longer periods of time. Here are a few ideas I’ve had:

  1. PICKLE rewards based on time spent in a Jar. There could be a weight/multiplier which would increase linearly over time for users. Say for example, up to a 20% boost on PICKLE rewards for being in a jar for 4 weeks. So after 1 week you would get a 5% weight boost, after 2 weeks 10%, etc. This boost needs to be relatively small (can’t be as big as the 2.5x boost on Ethereum) because if the boost is too large it will discourage new users from joining the Jar. Speed is the name of the game on these new chains and it would be a poor move to expect users to stick it out for 4 weeks to make using a Jar worthwhile. I think being able to obtain something like a 10-20% boost in PICKLE is a great middle ground where longtime users won’t be earning an unfair amount of bonus PICKLE versus new users, meaning new users shouldn’t be deterred.

  2. Another very popular, tried and true mechanism is withdrawal fees. They should not be implemented in a manner that feels like a punishment, but rather they should serve the primary function of keeping TVL in Pickle and rewarding those who do. A move that serves all of these parameters is a withdrawal fee that decreases linearly over time and is split between current users in a Jar. For example, there could be a 0.5% withdrawal fee which decreases linearly over 4 weeks. So, after 2 weeks, there would be a 0.25% fee and after 4 weeks 0% fee, etc. If a user withdraws, the fee is split between current users in a Jar. This discourages TVL from leaving but in a very reasonable way and further encourages users to stay in a Jar (potential withdrawal fees for them).

The best part about the above 2 mechanisms is that they would work in tandem. Every day a user spends in a Jar decreases their withdrawal fee while also increasing their PICKLE rewards. Upon reaching 4 weeks, a user could choose to exit a Jar without penalty, but would now be abandoning their bonus PICKLE rate. Each mechanism would ensure light “punishment” for leaving a Jar (fee in the beginning, losing bonus when leaving towards the end) and also ensure reward for those who stay in the Jars over time (fees + bonus).

Another idea to explore is deploying more “strategy” Jars rather than just simple “farm” Jars. On Polygon, the DAI Jar is a strategy which leverages DAI into Aave for a greater return than a single lend/harvest farm. Strategies such as these can be daunting/confusing or just “too risky” for an average user to do manually. Pickle Finance can take away all of that friction as they have with the DAI strategy Jar, thus offering users a very valuable service which would stand alongside our auto compounding service. Being able to offer more than just “auto compounding” would help make Pickle Finance more unique in the space and also provide users more total services and options.

Furthermore, there is no good reason to simply copy/paste the machanics of Jars to cheaper chains. A performance fee of 20% might be working on Ethereum, but perhaps a lower fee would make more sense when the service (autocompounding) is far less useful. It is clear that our emissions to side chains are siphoning value out of PICKLE (it just gets dumped). As a simple example, if we drop our emissions to 20% of what they are right now and drop performance fees to 25% of what they are (to 5% performance fees), I feel like we would retain pretty much the same level of attractiveness. Yes, there would be a net loss for users on how much total $ they get since the PICKLE reward is being dropped more than the performance fee is, but it means that there is less focus on the PICKLE token in general on these side chains which is critical when it currently serves almost no function there. This is good for the user because they don’t have to worry as much about the price of PICKLE being such a huge factor in deciding whether a Jar is worth it and it’s good for us because it means less value being siphoned out of PICKLE. The downside of course is generally a slightly lower total payout to Jar users. Though the fact that less PICKLE will be available for dumping on the market might mean that the $ in PICKLE paid out might not actually fall that much anyway.

A lot of talk in discord is about how we need to count on most users being lazy; that they will either dump their money into a Jar just for the sake of convenience or how they will leave their money in there even though the rewards don’t make sense to do so. This is not a winning strategy. Projects that bring great benefit to users in a frictionless and transparent manner are the ones that succeed, not the ones that simply prey on user laziness or ignorance. Did Alchemix become the behemoth that it is by hoping users were lazy, or did it attract everyone by providing an unmatched service? What about Maker? Do you think their current TVL is a result of users just leaving their funds with them or not knowing what they’re doing? No, protocols succeed when they either change the game or they simply offer a superior service. The latter is exactly the direction Pickle Finance has been taking since the launch of DILL on Ethereum. But if we don’t do something about our situation on other chains, we basically carry them around like weights chained (BLOCKchained) to our ankles. While Pickle on Ethereum continues to grow our greatness, the burden of new chains will always slow us down.

Dude.

What?

veCRV works similar to DILL. When Curve deploys a branch protocol on sidechains/L2s, there’s no veCRV locking or boosts there either.

The DILL DAO has authorized the SCCOC to oversee 43% of emissions, not the Core team. They have also voted 6 members of the SCCOC, which is both the quorum for their decisions passing and being valid. The SCCOC controls these emissions outright, and the DAO controls the SCCOC. DILL voters control directly the other 57% of emissions going to Ethereum farms. Therefore, DILL holders control all emissions, directly or indirectly. The Team also serves at the pleasure of the DAO. The DAO was faced with the choice of providing this power to the SCCOC or keeping things as-is and they choose the SCCOC approach. As we’ve established, DILL holders form the DAO which controls the SCCOC, and the SCCOC votes on hiring the team, conducts performance reviews, approves their dismissal, therefore, DILL holders ultimately control who gets into the Team. The DAO has also voted directly, for the increase in emissions. Again, DILL holders control all emissions.

You can. In fact, if you were in veCRV you would absolutely not be able to change the emissions at all. In Pickle, anyone can write a proposal on emissions, work with the rest of the DAO to make it workable and build consensus, get a SCCOC member to put it on Snapshot, and then expect the result to be implemented. Try that in Curve.

I understand you are a passionate community member, but we have a strong stance against posting FUD on public forums.

I will answer the main post here in due time as there are powerful ideas here but it is very disappointing to come to the forum and think a new user will land here and see these posts and take them as Gospel truth, which is why we want to avoid corrosive and scaremongering language.

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Replied in Dilldao discord channel.

Are you new to pickle? Having DILL in your wallet gives you access to the discussion in the dilldao channel :slight_smile:

Lol me? We were discussing something in there the other day. I rarely have the time to drop in and haven’t really be “active” (am I really even “active” now?) in the community but yeah we were having it out over how I would leave Pickle on Polygon the instant it wasn’t profitable to sell off the PICKLE on that chain. And how I felt that that’s how most people would treat it. Because for me and possibly others, autocompounding as a service is barely useful on a chain like Polygon, so people (me too) are really just using Polygon Pickle as a source of revenue to just dump off. Which is something I want to resolve because being a DILL holder I am also engaged with the Ethereum side of things and as such I want the best thing overall for Pickle Finance. But you can never blame a person for acting selfishly, it’s about designing a system where all incentives align. It’s the beauty of cryptocurrency and I hope we can achieve it on all chains.

nah, my line about dilldao is just an advert for people new to pickle, to inform them that such channel exists and there is chatter there.

SCCOC just proposed changes to the emissions on non-eth. Changes are good. Emissions to unsustainable farms on polygon are reduced, some rewards get shifted to Arbitrum. Seems like soon it will be time to move some of your tractors to Arbitrum :slight_smile:

DILL is the system where actors acting in the selfish manner also contribute to the greater good. The competition for votes and boosts helps the protocol. I hope we can get it soon on poly and arbi.

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Yeah I pretty much described this months ago but the new “big brains” here didn’t want to listen. Polygon was supposed to bring 1 billion TVL somehow even though Pickle isn’t even close to 1 billion TVL on mainnet. My problem with expanding to all these sidechains of ETH is that users are still coming from ETH so IMO you’re not going to see a huge increase. Just a shuffle of funds. If we really wanted to get TVL it would make more sense to expand outside of ETH or L2 projects to completely different blockchains within reason. But with whales now controlling the votes it becomes almost impossible. Yay for low pickle price!

Hi Pipickle :slight_smile:
Where do you recommend expanding?

Hey Jimmy, I’m note sure tbh since any expansion to a completely different Blockchain may require new devs. I’ll probably get hate for this but if you want new TVL then make something on Cardano or BSC. okex seems like it might bring new money but who knows. The issue is that revenue would probably be low depending on the strats for the other Blockchains.

My recommendation would be to just focus on ETH and be prepared for the merge and sharding vs trying to recreate the wheel on every crypto influencers fave sidechain of ETH. As noted here, high gas fees are what would bring people to Pickle. Arbitrum revenue is high now but I’m certain it will dry up once hype and “incentives” are gone.

pipickle, I think we have similar mindsets

there is no good scalable liquidity mining outside of ETH ecosystem. SOL ecosystem is completely different, not extremely promising and would require a lot of dev time.

We’re expanding to Okex soon.
Unsustainable polygon rewards are getting rugged very soon.
We’re heading for reduced emissions at the end of the year.
Everything is on the right track I think :slight_smile:

Some Arbitrum farms are already net profitable when accounting for emissions. Arbitrum has increasing fees in the range close to $10 per tx. We’re becoming useful there.

I’m thinking hard how to make picklings (pTokens) for ALCX-ETH and SPELL-ETH attractive.
I have brainstormed a lending marketplace where you can borrow USD against these pTokens (Jar tokens).
I have also considered making an index on each chain for such tokens and mocking DPI index as hard as possible.

These are very profitable jars and we need more TVL in these farms. Do you have any good ideas to boost them?
Are you in the dilldao discord channel?