Establishing Eligibility Criteria for Pools to Qualify for $TINY Farming Rewards

General
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Hi Everyone,

We want to express our gratitude for your valuable feedback and suggestions regarding the eligibility criteria for $TINY rewards pools. After internal discussions, we’ve decided to take a community-driven approach on this matter.

To that end, we’ve opened this thread, and we encourage your thoughtful contributions. Once we’ve gathered sufficient feedback, we may move forward with an on-chain proposal.

For the time being, we will exclude pools or tokens with low liquidity and clawback functionality enabled to protect our community.

We look forward to your input!

Best regards,
The Tinyman Team

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As of now what are the current criteria’s for pools to receive tiny rewards?

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Hi Eric and the Tinyman team,

Thank you for opening up this important discussion and taking a community-driven approach. I believe that a well-defined eligibility framework will help maintain the integrity of TINY farming while encouraging sustainable growth. Here are my thoughts:

  1. Balanced Incentives and Safety Measures: I agree with excluding pools with low liquidity or clawback functionality, as they present risks to participants. However, we could consider an adaptive threshold for liquidity levels, which can evolve over time to accommodate emerging projects that need initial support.
  2. TVL & Volume Requirements: Establishing minimum Total Value Locked (TVL) or trading volume could ensure that rewards are directed toward pools that actively contribute to Tinyman’s ecosystem. A weighted reward system based on liquidity and volume could also be explored to ensure fair distribution.
  3. Governance Voting Integration: I recommend tying eligibility criteria to active participation in governance. For example, governance participants could propose which pools should be eligible, or eligibility could be linked to voting metrics. This would foster a deeper connection between governance and farming activities, in line with ideas discussed in the commoditized governance votes proposal.
  4. Tokenized Farming Rights: Following the logic of $voTINY (or $veTINY) from previous discussions, farming rights could be tokenized, allowing participants to trade or rent them. This could enhance liquidity and engagement across multiple pools while giving the community more flexibility in deciding where to allocate rewards dynamically.
  5. Sustainability Focus: As we set eligibility standards, we should ensure they align with long-term goals like ecosystem sustainability. Rewarding pools that demonstrate consistent growth and community activity could prevent rewards from becoming concentrated in a few pools, promoting a more diverse and robust ecosystem.
  6. Implementation Proposal: Once we gather feedback, it might be beneficial to introduce test pools under the proposed criteria before finalizing the framework. This would allow the community to experiment, provide feedback, and ensure alignment before the on-chain proposal goes live.

I appreciate the openness to ideas and community involvement in shaping the future of Tinyman. These steps will not only ensure fairness but also create an ecosystem where governance, liquidity, and farming rewards are fully aligned.

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Hi @mangosteen Right now, it is a permissionless approach. Meaning, anyone with TINY power can vote any farm. There are no restrictions in place. Since we would like to refine that approach, we opened this thread.

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Great input @algotables !

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I agree with everything @algotables has mentioned. All make sense.

  1. Total minimum liquidity amount should be a requirement. Any pools that don’t meet the minimum liquidity requirement should not be eligible for rewards. By doing this we focus on serious pools with serious trades.

  2. Adding on to that, Is it possible to lock liquidity in pools for say 4 years or x amount of years? If this can be done - then I’d say this should be one parameter/requirement to measure how much rewards the pool gets.

A pool where say 90% of the liquidity is locked for 4 years plus should be eligible for more rewards than a pool where say 50% of the liquidity is locked.

This way you are rewarding long term liquidity providers who ain’t looking to rug pull. The more years locked the more rewards - similar to tiny token style governance.

  1. Trade volume is another factor. Pools with more trade volume should automatically get higher reward. As algotable mentioned.
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I appreciate you mentioning that because I had no idea what the hell I was doing. I just knew that I had a say in something that seemed important. I felt pretty out of place. I’m glad this is a major topic of discussion and could be something that gets officially changed or improved In the future. Thank you Eric

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I’m not in favor of a lot of strict rule for eligibility as this is supposed to be a permissionless protocol. I understand there probably needs to be some safeguards in place but if we want the Algorand community to grow and invite new projects into the ecosystem this is a GREAT way for them to get visibility. However its entirely possible a newly established pool by someone might not have the trading volume that would meet whatever eligibility would be considered high enough to be voted on for tiny rewards.

If the community is just going to be voting their TINY to the same large and established pools period after period there will be no incentive for a new token or community to strategically decide to buy up enough TINY power and lock it to vote on their pools. It would be the same poeple receiving the same rewards in the same pools every period and I don’t see any growth in that scenario. I think we would want other communities or individuals to see TINYMAN as the place they can market, reward, and grow a newer community by rewarding their project with TINY. They would just have to buy enough TINY in the market to make their Pool one of the top 60. That will drive up the buy demand of TINY and also increase the volume and TVL of their pools when others see the APR and might start adding to that pool.

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@jhalgo, I appreciate your perspective on keeping Tinyman open to new projects. A permissionless protocol is essential for growth, and you’re right that strict eligibility rules might limit opportunities for emerging pools to gain traction.

To balance inclusivity with the safety of the ecosystem, we could explore a tiered rewards system. This would allow pools with lower TVL and volume to participate while ensuring rewards remain aligned with their impact level:

  1. Tiered Rewards:
  • Tier 1: Low TVL/Volume pools can receive capped rewards, letting new or smaller pools engage without overexposing the ecosystem.
  • Tier 2: Moderate TVL/Volume pools, showing consistent activity, qualify for a higher reward cap.
  • Tier 3: High TVL/Volume pools, which contribute significantly to Tinyman’s stability, receive the highest reward cap.
  1. Flexibility and Growth:
  • This system gives newer pools a way to participate and grow, while encouraging projects to increase their TVL and volume to reach higher reward tiers over time. Each pool can build visibility and legitimacy progressively without creating excessive risk.
  1. Alignment with Adaptive Threshold:
  • This is an extension of the adaptive threshold idea, allowing rewards to scale based on activity, which could make Tinyman more dynamic and fair for both well-established and emerging pools.

By adding reasonable caps at each tier, we can stay true to the permissionless ethos you highlighted while protecting TINY holders and incentivizing growth across the board.

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Being permissionless and making it easy for new projects to grow and gain exposure is the way forward I agree too.

However, being permissionless is a double edge sword. 100% Decentralization is a double edge sword. You wil ALWAYS HAVE good apples and bad apples - this is a given.

So for new projects trying to gain exposure, I would strongly reccommend them to have some sort of liqudity lock up in the pool for say 4 or 5 years - this proves and shows the community right from the get go that this project is serious about growing. By doing this, the community don’t have to worry about rugging therefor the community will probably trust this new project enough to add their own liquidity further into the pool too which is a win win for the project and users/community.

We need rules. Without them - nothing works.

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Hi Eric, is their away to lock up liquidity in pools for x amount of years in a smart contract? Is this possible to do ?

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“For the time being, we will exclude pools or tokens with low liquidity and clawback functionality enabled to protect our community.” what this means in practice? what is considered as low liquidity? Have to say, I think this doesn’t sound good without more details, not going to lie. so we are not able to boost COOP/GOLD$ & COOP/SILVER$ LPs anymore because GOLD$ & SILVER$ has clawbacks? or basically any Wormhole tokens like wAVAX, wLINK, wSOL against COOP because those pools has low liquidity & Wormhole has clawbacks? I try to be polite, but this is bad.

I hope, I have understood this whole thing wrong way…

Best regards,
ROAM

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thought this a bit more and I think if you try to block users to incentivize pools they like, they will probably game this. So they will allocate rewards into pool where they can achieve easily pretty large percentage. Maybe even make some new pool that just fits into criteria and then have 100% allocation of it. then farm those TINY rewards completely and then sell all farmed TINY tokens or converts into token they like to support. so in other words this will lead into increased sell activity when people will circulate these restrictions. and I think you don’t want that.

Best regards,
ROAM

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Hi @ROAM,

Thanks for sharing your thoughts—I appreciate the opportunity to engage in this discussion. I think we both want Tinyman to grow and succeed, so I’d like to address a few points you raised and offer some ideas on how we can better align rewards with the goals of both the protocol and the TINY community.

1. User Safety is a Core Concern

Clawback and freeze functionality, which exist on some tokens, pose significant risks:

  • Clawback allows issuers to forcibly retrieve tokens, undermining trust for liquidity providers.
  • Freeze functionality can halt transactions entirely, creating additional uncertainty for users.

To maintain Tinyman’s reputation as a secure and decentralized protocol, it’s critical to prioritize clawback-free assets. For example:

  • Messina.one bridges provide tokens like PEPE and BOBO without clawback or freeze, ensuring user safety while bringing in valuable external liquidity.
  • Algomint’s goBTC and goETH offer decentralized, trusted assets, creating secure and stable pairs for trading.

These types of assets align with Tinyman’s principles of decentralization and security. Conversely, tokens with clawback or freeze capabilities pose risks that could undermine trust and user confidence, which is why they should not be eligible for farming rewards.

2. Why Not Freeze- and Clawback-Free Versions?

This raises an important question about assets with these functionalities: Why couldn’t issuers, such as Meld, create versions of their tokens specifically for DeFi that don’t include freeze or clawback?

Respectfully, I’m genuinely perplexed why this isn’t already being done. Creating DeFi-specific versions of tokens without these features seems like a reasonable solution to align with the principles of decentralized finance while still retaining other versions with traditional controls for use in more centralized contexts.

Such an approach could:

  • Enhance user trust by ensuring the tokens used in Tinyman pools are free from risks associated with clawback or freeze.
  • Expand utility by tailoring assets for both traditional and decentralized use cases, rather than forcing one set of controls across all applications.
  • Align with DeFi principles, making it easier to prioritize these assets within Tinyman’s farming rewards structure.

This isn’t to criticize Meld or similar projects—it’s simply to ask whether this is a consideration and, if not, why. From an ecosystem perspective, it seems like a straightforward step to create a more secure and decentralized trading environment.

3. Integrating Voting with a Tiered System

The governance voting process is essential to Tinyman’s decentralization. Currently, TINY holders vote to select the top 60 pools for farming rewards each month. To align voting outcomes with the protocol’s goals, a tiered system can be integrated to ensure rewards are distributed fairly and strategically.

Here’s how it works:

  • Step 1: Community Voting Determines the Top 60 Pools:
    • Every month, TINY holders vote on pools they want to support. The 60 pools with the most votes are selected for farming.
    • This ensures that community priorities are respected and that new and established projects can compete on a level playing field.
  • Step 2: Tiers Structure Reward Distribution:
    • Once the top 60 pools are chosen, they are grouped into tiers based on their liquidity and trading activity:
      • Tier 1 (High Contribution Pools): The top 10 pools based on liquidity (>1% of TVL) and volume (>0.5% of total volume) receive 60% of the rewards.
      • Tier 2 (Moderate Contribution Pools): The next 20 pools with moderate liquidity (0.5%–1% of TVL) and volume (0.2%–0.5% of total volume) receive 30% of the rewards.
      • Tier 3 (Emerging Pools): The remaining 30 pools, typically smaller or newer, receive 10% of the rewards.

This framework ensures that while voting determines participation, rewards are distributed strategically to reflect the pools’ overall contributions to Tinyman.

4. Proportional Rewards Within Tiers

Once the top 60 pools are selected by community voting, rewards within each tier can be distributed based on their contributions:

  • 50% of rewards are tied to liquidity: Bigger pools that provide stability are recognized.
  • 50% of rewards are tied to volume: Active pools driving engagement and trading activity are rewarded.

Simplified Example

If Tier 1 pools collectively have $12M in liquidity and $400K in weekly trading volume:

  • gALGO/ALGO: 52% of TVL and 29% of volume → Earns 40% of Tier 1 rewards.
  • USDC/ALGO: 37% of TVL and 4% of volume → Earns 20% of Tier 1 rewards.
  • TINY/ALGO: 8% of TVL and 69% of volume → Earns 39% of Tier 1 rewards.

This proportional allocation ensures fairness and incentivizes pools to grow both liquidity and trading activity, while respecting the outcomes of the voting process.

5. Moving Forward: Aligning Rewards with Impact

This approach ensures that rewards are directed toward pools that:

  • Provide high liquidity and volume to stabilize and drive Tinyman’s ecosystem.
  • Use clawback- and freeze-free assets to protect users and align with Tinyman’s decentralized principles.

Pools utilizing clawback or freeze functionality should not be eligible for farming rewards, as these features pose risks to users and are incompatible with the trustless and decentralized environment that Tinyman strives to provide. While such tokens can still exist within the ecosystem, farming incentives should prioritize safety, transparency, and alignment with DeFi principles.

Final Thoughts

This isn’t about limiting participation—it’s about ensuring rewards go to pools that create the most value for Tinyman and its community. By combining community voting with a tiered reward structure, we can prioritize meaningful contributions, safeguard user safety, and foster sustainable growth across all tiers of pools.

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Hi,

First regarding clawback & freeze:
You ask “Why couldn’t issuers, such as Meld, create versions of their tokens specifically for DeFi that don’t include freeze or clawback?” - answer is simple, to meet regulations and laws. Say you have tokenized mutual fund shares, you have to be able to freeze assets (comes from law) and you also have to be able to clawback tokens in case of death (move funds to estates). Regarding Meld case, I couldn’t find post from Meld, but this was asked and answered at some point and reason was laws. also Wormhole wants to meet big institution requirements so they have those enabled. so it is nice idea not to have freeze & clawbacks on, and might work with meme tokens, but with regulated assets those will be there, we want it or not. for example USDC has freeze enabled, so should Tinyman remove that too? I think this is empty conversation. no mean to be rude, but reality check.

what comes to tiered system, this sounds like “we know better” and basically Tinyman will take away part of Governors voting power to “guide” users to do better decisions. that is not good. Why they didn’t held X% of tokens in some “core incentives”-wallet, because what they will do now, is they kind of go against decentralized voting system more towards authoritarian & centralized decision making, taking away governors power to decide. or now they can “decide” from couple “better” options, if you want to put it that way. (technical implementation is not important but end result)
For example you have gALGO in your examples. that is good example of flaw in logic. why would we focus on that token at all or allocate any incentives into that one? it will be soon pretty pointless even if not deprecated completely. So now we want to create system where we incentivize tokens in very short term, just to boost farmers yields, with no long-term focus in mind? (might be intentional or side effect of poor design)

If we now compare that forced model to free one:
In forced model, say CompX has to allocate (directly or indirectly) into pools they will not use or want to focus on. Also they are not necessarily capable to boost pools they want. In free model they can allocate incentives into pools they think will help their growth best.
→ forced system leads them into parting of the ways type of situation:

  1. Do they want to multiply by X their TINY power to get their actual voting power back? if that will even help in certain situations.
    or
  2. Will they shift focus else where and kind of ignore TINY governance and lose interest to increase their voting power, because always part of their voting power will be forcibly taken away.
    that said, I have no idea what CompX thinks. This was just for sake of an example.

If we look at CRV point of view, we collected TINY donations so we can boost our COOP pools even more. if this model is forced where we are not fully in control of our voting power, will people be still willing to support CRV’s Tinyman governance power growth aims? and donate even more? no so sure to be honest. you are kind of slapping us in the face because we tried to support you as much as possible. CRV has never sold, not even one, TINY token and constantly increased its TINY holding and now this will be our reward…

I kind of get point why you want to do this, but I also saw many angry discord conversations how you will kill or make it hard for small communities and community projects to boost their pools. Now you have to flip coin and see if people will vote with their feet and sell farmed TINY tokens to offset this loss or some other way ignore Tinyman bit more. or drop their Tinyman governance power growth plans. not sure if this will happen, but I think this is not risk you should take.

This should have be though or implemented into design from the beginning and not forcibly implemented later on.
Now you will say, this will be voted. sure… large players will get even more power to themselves. so now big players grow even bigger and will use their dominance to cement their dominance even more. or at least this will lead into it.

I just fear that tiered system leads into complicated multistep system that will eventually just support bigger players and pools. for example we have managed to grow COOP/xUSD pool very quickly from something like $2k pool to $30k pool. now if this forced system comes, that will not be possible anymore. I just get really bad soviet union vibes; “make it for the system”. we all know how that will end…

Best regards,
ROAM

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Just to make sure, my previous comment was not targeted personally against you and not to be mean to be rude post. it was more about to raise my concern. I fear that now when we have good drive going on on Tinyman and on Algorand in general and everyone seem to be happy. TINY token price has held surprisingly well and people seem to like Tinyman governance. then now you (Tinyman community / Tinyman team) start to tell people how they should vote and what is right and wrong etc. just do not nuke everything now by trying to make unnecessary micro management. If this kills small community efforts and innovative moves then, well… not so good.

ROAM

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Hi Everyone,

Thank you for your valuable feedback and contributions to this thread.

Establishing eligibility criteria for rewards is a complex and nuanced matter. Our long-term vision for Tinyman is to evolve into a fully permissionless protocol. In this process, we are counting on TINY governors to act in the best interest of the protocol and make decisions that will ensure its continued success and sustainability.

We want to emphasize that we have no intention of excluding any established tokens or pools from receiving rewards. However, we may closely monitor certain pools/assets that fall under the following categories:

  • Recently created pool assets
  • Pools with small TVL (Total Value Locked) and limited trading activity
  • Pools with a low number of liquidity providers (LPs)
  • Pools involving assets with clawback functionality enabled
  • Unverified assets
  • Low community engagement around the pool
  • Low participation in governance, particularly the number of governance accounts that voted for the pool

If a pool voted for TINY farming rewards falls under multiple of these categories, we may manually exclude it from the rewards distribution, at least for the time being.

We appreciate your understanding as we continue to refine the process. Your feedback is vital as we work towards building a robust and sustainable ecosystem.

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Are these guidelines, more like disclaimer against rugs & scams? or how strict these rules will be? My point is not to be a$$hole in here. just so we (CRV) know what to expect and avoid surprises, and how to operate in the future.

Regarding this I have one example:
In CRV we have coming new partnership with one of the liquid staking tokens and we might want to boost that pool (first we have to internally vote etc.). Now because initially that pool TVL will be low, are we able to boost it? or how this works?
It might fall under many of the categories you mention:

  • “Recently created pool assets”
  • “Pools with small TVL”
  • “Low community engagement around the pool” - at first
  • “Low participation in governance, particularly the number of governance accounts that voted for the pool” - CRV boost pools that community want but do not necessarily be that active in governance if proposal comes quickly like last one, because we have to vote first what CRV will vote (might take up to week). also CRV do not necessarily have own position in pool it has allocated its voting power.

So I just fear these kind of rules will limit our ability to operate. or are my concerns unnecessary and you see that this kind of behavior and these kind of partnership boost will be acceptable?

Best regards,
ROAM

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Hi @ROAM , at Tinyman, we’re committed to fostering the growth of the Algorand ecosystem by supporting quality projects and tokens. We recognize that new projects often face challenges in securing initial capital or liquidity, which can result in lower TVL and limited trading volume in their early stages.

We fully understand that setting up a pool and offering farming rewards is a powerful tool for growing a project’s community and encouraging participation. This is something we fully support, and it is not our intention to block or hinder new projects in this regard.

That said, our primary responsibility is to protect the Tinyman community from potential risks, such as scams or rug pulls. Our goal is to ensure that TINY rewards are directed towards pools that demonstrate genuine activity and long-term potential. This approach helps us maintain a healthy and secure ecosystem for all participants while incentivizing real engagement.

We believe that by striking this balance, we can nurture new projects while also safeguarding the interests of our community.

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ok, good to hear! Good that you try to keep scams and rugs away from Tinyman platform, or at least not help them to thrive in here :+1: I fully support that effort

Regards,
ROAM

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