Research around ANGLE incentives effectiveness

ANGLE incentives effectiveness: are incentives the best way for the protocol to use the ANGLE tokens held by Governance?

We recently conducted an internal research to get a sense of how effective ANGLE incentives were from a different angle (pun intended) than for AIP - 31.

This time, the goal was to understand how liquidity on pools react to changes in incentives. In other words, is liquidity changing according to incentives or not ? Depending on this relation, we can understand better if ANGLE incentives are effective to attract and/or retain liquidity.


For a given pool, if TVL doesn’t change when incentives increase, the increase is probably a waste of incentives.

Similarly, if TVL doesn’t change when incentives decrease, it could mean that liquidity on the pool is rather sticky and doesn’t care much about incentives, which would then be wastes. In this case, we could try to decrease them again.

To measure that, we built a dashboard comparing the change in ANGLE incentives each pool receives with their change in TVL, week over week. Shoutout to @adcv who inspired this analysis with his original ANGLE incentives dashboard.

You can read the complete analysis here:

Disclaimer: there is only around a year of data, so conclusions shouldn’t be taken as definitive but rather give us a sense of how liquidity and incentives react to each other.


  1. Once pools are “setup”, reward increases are usually under-effective, and decreases over-effective (less TVL loss than incentives decrease). Also, the bigger the pool, the less a change in incentives seem to make an impact.
    → incentives seem to be an efficient way to attract liquidity, but an inefficient way to retain it
  2. The decrease of 20% in ANGLE distribution voted in AIP-31 in mid-October incentives apparently had a negligible impact on TVL.
  3. Current incentives split between the different gauges is not optimal (cf sanFRAX), and the protocol is currently wasting ANGLE tokens.

→ From #1, it seems that using ANGLE emissions to incentivize liquidity over the long-run is a waste of ANGLE.

This can be thought about as a two part problem:

  1. How to distribute ANGLE tokens to grow the protocol efficiently and decentralize its ownership
  2. How to incentivize Angle liquidity (agEUR).

→ #2 and #3 are arguments to try and decrease incentives again before finding a better way to distribute incentives to the different pools efficiently.

We opened AIP-57 to lower incentives again.

The future of ANGLE incentives

This is just the beginning of a discussion around incentives and ANGLE distribution in general. The questions we now face is:

How can Angle Governance best use the ANGLE tokens at its disposal? Is it by incentivizing liquidity, or are there better uses of this capital?

All your feedback and thoughts are appreciated!


Great study!

I don’t think the effect of incentive is so direct… Liquidity providers can take time to:

  1. discover the change of incentive
  2. find the proper way to change liquidity providing (because of loss/ Tax issues / belief in a token / etc.)

At the end of the day, the incentive is voted by active veAngle holders… that also receive boost (e.g. x2.5 in the incentive) so they should be aligned with a strong angle asset, no ?


ps: How does it work with curve ? the big difference with curve is that angle wants to promote ageur liquidity while curve wants to promote “fees” ?


While TVL is a useful metric to measure the effectiveness of ANGLE incentives, it may be helpful to consider other metrics such as trading volume, fees generated, and user activity. Evaluating these metrics may provide additional insights into the effectiveness of ANGLE incentives.

Thanks! And sorry for the late reply.

Yes, you’re probably right that there is a delay between change in incentives and its impact on liquidity, but it’s very hard to evaluate.

About the alignment of incentives, it depends on how much veANGLE one needs to get your boost, and for how long they plan to farm. Potentially, buying and locking ANGLE can be profitable to farm ANGLE with sufficient liquidity and over a specific period of time.

With Curve, the tokens sent to the Curve Incentives gauge are all spent on bribes to veCRV holders.

I’m not sure I agree with you on that.

Although all these metrics are interesting for agEUR, they are not influenced by ANGLE incentives. Also, fees generated by a pool is a metric for LPs and not the protocol. Except if you meant protocol (Angle) fees, in which case you’re right ! However, the link between protocol fees and ANGLE incentives is very indirect.