Discover how we are using Soroban smart contracts to create a new AMM ecosystem on Stellar

Today, if you browse through any Stellar-focused social media channel, you’ll find that Soroban is the predominant topic of discussion. Soroban — is an upcoming Rust-based smart contracts platform that seamlessly integrates with the existing Stellar blockchain.

This new technology is expected to go live on January 30, 2024, and the Stellar community looks forward to trying it out. If you follow us on Discord or X, you may notice that Aquarius has been a part of this journey from the beginning. In this article, we aim to share our experiences with Soroban, highlighting the milestones we achieved in 2023 and giving you a look at our exciting plans for 2024.

Soroban: New chapter for Aquarius.

2023 was a landmark year for us in exploring and advancing our capabilities with the help of Soroban. While we developed and improved our existing functionality and interfaces, our focal point was undeniably centered on developing smart contracts around Aquarius.

Since 2021, Aquarius has been actively helping improve liquidity on Stellar DEX and AMMs. We incentivized Stellar users to provide liquidity to hundreds of markets and distributed more than 6B of AQUA as rewards to market makers and liquidity providers. We received a ton of positive feedback from asset issuers who used the Aquarius platform to attract market liquidity.

Merging new capabilities of Soroban smart contracts with our existing experience enabled us to come up with a bigger vision for Aquarius, and we’ve been busy building the way forward.

We have set the following goals for the upcoming Soroban release:

• Create and oversee our own Aquarius Liquidity pool;
• Build and launch Aquarius’ own AMMs engine and support liquidity providers with AQUA rewards;
• Rewrite some existing Aquarius modules using smart contracts to decentralize the protocol further.

Let’s look at the progress of our plans together and what we have already accomplished.

Building AMM engines on Soroban

During the last few months, we have built a set of Automated Market Maker (AMM) smart contracts running on the Soroban futurenet and testnet. We’ve experimented with various AMM design ideas and are currently focused on building smart contracts to manage these AMMs and use them depending on user needs. In Aquarius, we’ve integrated two AMM models, drawing inspiration from the top AMM platforms on Ethereum — Curve and Uniswap. We’ve adopted Uniswap’s Constant Product Market Maker (CPMM) model, which is effective for a broad range of assets, and Curve’s Stable Swap, known for its efficiency with correlated assets.

Curve’s Stable Swap model stands out in the decentralized finance sector for its efficiency in handling stablecoins and other asset swaps with minimal price variance. This cost-effective approach results in significantly lower slippage for trades, which is particularly beneficial for large transactions where even a minor percentage of slippage can lead to substantial value differences. Focus on stable or correlated assets also means a reduced risk of impermanent loss for liquidity providers, enhancing its appeal as a secure option in the DeFi landscape. We’re excited about bringing Stable Swaps to the Stellar network!

Also, we’ve implemented a smart contract that manages AQUA rewards distribution based on the user’s pool share. AQUA rewards will incentivize users to provide liquidity to the new Aquarius Soroban AMMs. The distribution engine runs as a set of Soroban smart contracts that will calculate and distribute liquidity rewards to LPs accordingly. This goes in line with our goals to further decentralize Aquarius. This is something that was not possible before on Stellar.

We still have a few smart contracts that need to be developed, like the Aquarius Swap Router. This smart contract provides a single interface method for performing swaps and identifying the best pool to execute a swap. This Router will be integrated into our front-end interface and be available for external applications such as AMM aggregators or wallets. These applications can use the Router to get quotes and preview the swap results, enhancing user experience and platform utility.

We’re focused on the security and reliability of our codebase, involving comprehensive testing, code reviews, and documentation. Additionally, we’ll conduct a security audit in collaboration with the Stellar Development Foundation (SDF) to address any vulnerabilities. Scalability testing is also planned to ensure efficient real-world performance. These steps represent our commitment to delivering a secure, scalable, and user-friendly platform, paving the way for a more efficient and reliable DeFi ecosystem on the Stellar network.

New UI for new AMMs

In our upcoming developments, we plan to unveil a new front-end interface for Aquarius to enhance the user experience significantly. This future update is set to include a user-friendly platform for asset swapping through the Aquarius AMM. It will also allow straightforward management of liquidity positions and LP tokens, with users able to view and claim their AQUA rewards directly within the interface.

Additionally, the interface will offer comprehensive analytics, providing insights into Total Value Locked (TVL), volume, key stats like APY, and detailed information on various AMM pools. The creation of new AMM pools will be streamlined, with functionalities to assist in setting parameters and preventing the duplication of pools.

Finally, we plan to expand our voting dashboard to support more inclusive governance, particularly for pools with over two tokens, ensuring our platform remains user-friendly and engaging.

What’s under the hood?

We currently have four ready Soroban smart contracts: Liquidity Pool Router, AMM Token, and two AMM pools — CPMM and StableSwap.

For those with a technical background, our smart contracts are available for review on the Aquarius GitHub repository.

Here is a short description of our existing smart contracts:

Liquidity Pool Router contract

This is an entry point for Aquarius AMMs. The Router contains all general information about AMM pools and creates new pools on demand. This smart contract stores information about different AMM models. The Router controls how multiple types of AMM will work for the same market pair. Currently, we have two AMM models, and more models will be added soon.

AMM Token contract

Implements the Token Soroban interface. Its purpose is to store pool shares. The new contract deploys automatically for every new AMM pool.

CPMM pool contract

This is the smart contract of the Constant Product Market Maker (CPMM) pool. We automatically create a new CPMM smart contract for every new CPMM pool. Swap fees are configurable and can be set for any new AMM pool contract.

StableSwap AMM pool contract

The StableSwap AMM model allows for two or more assets of similar value to be placed into a pool to be exchanged against each other with very low slippage, allowing users to exchange between the assets in the pool freely. Across blockchains, you can find many assets that can represent the same real-world asset. For example, you can create a StableSwap pool on Stellar with USDC, USDT, and yUSDC assets, representing real-world USD assets.

Launch timeline.

As we approach the final stages of development, we’re confident that Aquarius AMMs will be fully prepared for the Soroban release. We’re excited about the significant progress we’ve made and are eagerly anticipating the upcoming launch. This milestone marks the culmination of our dedicated efforts and the beginning of a new chapter in decentralized finance on the Stellar network.

We anticipate significant liquidity within our AMMs, and we’ve seen a lot of interest in our AMMs from ecosystem wallets, exchanges, and other DeFi products. Projects utilizing our AMMs will gain significant advantages, as their users will enjoy immediate access to diverse markets, benefit from competitive exchange rates, and tap into a greater pool of usable liquidity, thanks to the innovative design of Aquarius AMMs. We are in touch with several key ecosystem participants to get the new DeFi swaps powered by Aquarius integrated and readily available in multiple products.

Stay tuned for the big reveal, where we will showcase the power and potential of Aquarius AMMs on the Soroban platform.

Website | Twitter | Discord | Reddit | Telegram | GitHub | YouTube

Aquarius AMMs — Updates and plans for 2024 was originally published in Aquarius / AQUA on Medium, where people are continuing the conversation by highlighting and responding to this story.

Soroban smart contracts bring a host of opportunities to the Stellar network, opening the doors for an improved, feature-filled network. As such, at Aquarius, we are harnessing this new powerhouse to rebuild the Automated Market Maker (AMM) landscape on Stellar, helping further our mission to expand liquidity across the Stellar network.

To help accelerate our progress, we are thrilled to announce Aquarius is participating in Stellar Community Fund (SCF #15), with our first deliverable already achieved! By leveraging the capabilities of Soroban, we aim to make Aquarius the first decentralized AMM protocol on Stellar, revolutionizing the way users trade and access liquidity.

♒️ What is Aquarius?

So let us remind you about Aquarius and our achievements since the projects launch in 2021. Aquarius is a unique liquidity layer built on the Stellar network, designed to bring liquidity to Stellar’s layer one DEX and native AMMs by incentivizing liquidity providers.

The ecosystem is entirely powered by on-chain governance systems that employ Aquarius’ AQUA and ICE tokens. AQUA is held by over 120K wallets and is the core asset for Aquarius, whereas ICE is the frozen equivalent. Those who freeze AQUA into ICE can gain increased voting power and boosted hourly rewards when providing liquidity.

AQUA and ICE holders use their tokens to vote on governance proposals and also decide which Stellar DEX & AMM markets receive hourly incentivization rewards. Rewards are delivered to liquidity providers of top-voted markets, establishing a robust system for earning extra rewards when contributing towards liquid markets on Stellar.

To date, we have delivered 4 billion AQUA tokens in rewards to liquidity providers. At today’s price, that’s the equivalent of $2,250,000!

🤝 Our vision with SCF support

With the support of the SCF, we have ambitious milestones to foster the growth and development of Soroban, Stellar, and Aquarius:

1. Soroban-Powered AMMs: Our initial aim is to create a suite of Uniswap v2 style AMM smart contracts running on the futurenet of Soroban and a simple demo interface to show their capabilities. More advanced research can also result in the development of complex AMM builds. This includes potential new AMM types for Stellar, such as stable swaps, multi-asset (MAMM), and concentrated liquidity (CLMM).
2. AQUA Rewards for LPs on Soroban: Our second goal is to build upon our reward distribution engines, allowing them to run independently on Soroban. These engines will operate as a set of Soroban smart contracts on futurenet, calculating and distributing AQUA rewards to LPs. This aligns with our goal of further decentralizing Aquarius.
3. Introducing Stellar Smart Contracts to Users: With over 120,000 AQUA token holders, Aquarius stands as one of the most actively used DeFi ecosystems on Stellar. As such, we will strive to familiarize our user base with Soroban and encourage ecosystem projects who use our protocol to experiment and explore Soroban-powered solutions. Additional blog posts and various social media content dedicated to Soroban will help educate the ever-growing Stellar community.

👷 Let the building commence!

In conclusion, we at Aquarius are committed to bringing innovation and growth to the Stellar ecosystem. By leveraging Soroban’s smart contract capabilities to design new AMMs, we aim to increase concentrated, useable liquidity on Stellar, creating a better trading experience for everyone.

As we enter the Smart Contract Era, the combination of our liquidity incentivization system, Soroban, and advanced AMMs is poised to create an exciting base for liquidity growth on Stellar, bringing us one step closer to a decentralized financial system.

We want to express our gratitude to the Stellar Community Fund for considering our project. We also want to thank our fantastic community, especially our AQUA token holders, for their continued support and belief in our mission.

Stay tuned for updates as we progress with our roadmap!

To learn more about Aquarius, visit our website:
https://aqua.network

To view our SCF #15 submission, please visit:
https://communityfund.stellar.org/projects/soroban--aquarius-scf-15

Website | Twitter | Discord | Reddit | Telegram | GitHub | YouTube

SCF round 15: Aquarius & Soroban was originally published in Aquarius / AQUA on Medium, where people are continuing the conversation by highlighting and responding to this story.

Part of constantly growing Aquarius is ensuring the protocol is operational, reliable, and consistently performing to the highest standards. Now and then, a coding bug or loophole can cause issues, creating vulnerabilities to the Aquarius protocol.

Aquarius offers bug bounties to those who find and raise vulnerabilities with the team, allowing fix deployments that safeguard Aquarius.

The bug bounty fund is tied to the 2.5 Billion AQUA emergency fund.

What bugs can result in rewards?

Reward considerations apply to most bugs found that can negatively impact Aquarius. Bounties are paid at the teams sole discretion, with reward values dependant on an issues severity and complexity.

While we can consider a lot of different issues for a bounty, the following points would not come under our scope:

• Bugs found in third-party platforms that interact with Aquarius
• Vulnerabilities already reported or discovered by the team or advisors
• Any already-reported bugs by others in the community

Vulnerabilities that occur due to any of the following are also outside of the bug bounties scope:

• Front end bugs
• DDOS attacks
• Spamming
• Phishing
• Compromise or misuse of third-party systems or services.

How should I report potential bugs?

Any vulnerability or bug discovered should be reported via private message to any of the admins of the Telegram, Discord, or Reddit channels or our bug reporting email address security@aqua.network.

Disclosure of vulnerabilities must not be made public or to any persons, entities, or email addresses before Aquarius has been notified and a fix deployed. Bug disclosures should preferably be made within 24 hours of discovery. Once fixed, Aquarius will grant permission for public disclosure.

When submitting a report, please provide as much detailed information about the vulnerability. Higher quality and more detailed vulnerability reports increase the chance of a reward.

Points to consider in your report are:

• What conditions cause the bug to occur
• All steps needed to replicate the bug and if possible a demo video/screenshots showcasing the bug
• Explanation of potential effects if the vulnerability is abused

Those who report bugs and vulnerabilities that result in a fix deployment by the Aquarius team can choose to be publicly recognized if they wish.

Eligibility

To be eligible for an Aquarius bug bounty reward, you must:

• Be of legal age in the jurisdiction where you reside or, if younger, submit your vulnerability with parental or guardian consent.
• Be first to discover and disclose a previously unreported, non-public vulnerability that could result in abuse or compromization of the Aquarius protocol to the Aquarius team in compliance with the above disclosure requirements.

(If multiple users report similar vulnerabilities within 24 hours, rewards will be split at the discretion of Aquarius.)

• Provide sufficient information so our developers can reproduce and fix the vulnerability.
• Submit only one vulnerability per submission unless you need to chain vulnerabilities to provide impact regarding any of the vulnerabilities.
• Not submit separate underlying vulnerabilities caused by a known issue already considered for a bug bounty.
• Do not engage in unlawful conduct when disclosing the bug to Aquarius, including through threats, demands, or other coercive tactics.
• Not exploit the vulnerability in any way, including making it public or obtaining a profit (other than a payment from the Auqarius bug bounty program).
• Make a reasonable faith effort to avoid privacy violations, data destruction, interruption, or degradation of the Aquarius protocol.
• Not be subject to US/EU sanctions or reside in a US/EU-embargoed country.
• Not be a current or former employee (within 6 months), vendor, contractor, agent, or former employee (within 6 months) of any of those vendors, contractors, or agents.
• Comply with all the Aquairus bug bounty eligibility requirements.

Other Terms

By submitting a report, you grant Aquarius all rights, including intellectual property rights, needed to validate, mitigate, and disclose the vulnerability. All reward decisions are made at our sole discretion, including eligibility, reward amounts, and how such rewards will be paid.

Aquarius may alter the terms and conditions of this program at any time.

Website | Twitter | Discord | Reddit | Telegram | GitHub

What an incredible first year we have had here at Aquarius! We’ve enjoyed every moment, from the first protocol ideas & minting of AQUA on Stellar to the launch of liquidity rewards & governance. It’s been quite the journey so far, and we’re excited to bring you in on our next plans for the Aquarius ecosystem.

Aquarius has always had one main goal, to bring more liquidity to Stellar.

A jump towards this goal started when we launched AQUA liquidity rewards. Our rewards engines distribute AQUA hourly to market makers & liquidity providers who bring assets to Stellar and increase liquidity on specific markets.

With the liquidity voting tool, AQUA holders can choose markets that qualify for the reward zone and earn additional liquidity rewards. Alternatively, holders can use their AQUA inside Aquarius Governance to vote on proposals that can change how Aquarius functions.

Although participation in both liquidity & governance voting is high, holders need to either allocate AQUA towards liquidity or governance voting without a way to do both simultaneously. We believe it’s time to lift AQUA’s limitations, giving loyal AQUA holders more flexibility & greater benefits.

Today, we are introducing ICE tokens, an upcoming way for AQUA holders to increase yield earned through AMM & SDEX rewards and boost their voting flexibility & power throughout Aquarius.

🧊 ICE tokens

So what are ICE tokens?
ICE tokens work similarly to veCRV on the Curve platform, with users locking the main CRV token in exchange for veCRV. This secondary token allows for voting in governance and boosts CRV liquidity rewards on Curve.

We will be taking this core idea and revamping it for use inside the Stellar ecosystem. Users who lock (freeze) AQUA will receive four additional non-transferable tokens inside their Stellar wallets, specifically for use in the Aquarius universe.

These tokens are:

• ICE
• upvoteICE
• downvoteICE
• governICE

All four tokens are minted on the Stellar network and use the aqua.network domain name. These are non-transferable tokens, so they can’t be bought, sold, or transferred to another Stellar wallet. They will only be obtainable by locking AQUA via the Aquarius locker tool, so beware of fakes! These tokens do not exist yet and can’t be bought or swapped on the SDEX. We will announce further updates about the launch only through our official social media channels (Twitter, Telegram, Discord, and Medium).

Although four new tokens may sound daunting, all our products will guide and help you understand which of these tokens you will use in any specific case. Each of the new ICE tokens brings additional features & benefits to those who decide to freeze AQUA. So how does the process work and what are the benefits?

❄️ Freezing AQUA

Thanks to airdrop #2, we already have a way for users to freeze AQUA for up to three years through the locker tool. To build upon this further, we will expand the locker tool’s functionality, allowing it to distribute the new ICE tokens to users when they lock AQUA.

The process is quick and easy, with the tool helping create trustlines and distribute all four ICE tokens to users when they freeze their AQUA. Freezing is done via claimable balances on Stellar, ensuring immutability and transparency.

Those who have previously locked AQUA tokens using the locker tool will be able to claim all four ICE tokens upon launch, giving their locked AQUA a boost and making them usable again inside of the Aquarius ecosystem.

So why bother freezing AQUA in exchange for the new utility tokens?

Once users freeze their AQUA into ICE, they immediately get access to increased yields from SDEX & AMM rewards, boosted power for liquidity & governance voting, and expanded freedom within the Aquarius ecosystem.

Keep reading below to discover how this works.

🧑‍🌾 Increased Liquidity Rewards

We believe increased participation in Aquarius deserves increased AQUA liquidity rewards. So first and foremost, freezing AQUA immediately boosts your yield earning capability when market-making & liquidity providing on reward zone markets.

The main benefit of ICE is the ability to boost your rewards on provided liquidity. The higher a user’s ICE balance, the higher their boost for liquidity rewards.

Currently, your AQUA liquidity rewards don’t depend on your AQUA balance. After the ICE launch, those who do hold AQUA can choose to freeze them into ICE to earn vastly increased SDEX & AMM liquidity rewards.

🤸 Voting Flexibility

The three remaining ICE tokens all contribute toward voting flexibility, with each used for a specific voting function within Aquarius. Although non-transferable, they can still be placed inside claimable balances, allowing for their voting functionality.

upvoteICE & downvoteICE will work inside vote.aqua.network, where they are used to select markets that will receive AQUA liquidity rewards. downvoteICE will be used to downvote markets in liquidity voting. Additionally, both of these tokens are only subject to a 1 hour minimum voting period. Swap and change your votes anytime to your heart’s content!

governICE will work inside gov.aqua.network, where they are used to vote for or against active governance proposals. governICE is not affected by the Vote Lock Periods introduced in gov v2.0 and is available to reclaim 1 hour after a proposal vote ends.

The best part is that you can use all three simultaneously! There’ll be no more hard decisions on whether to stop voting for your favourite markets to participate in governance or vote against any other market pair.

🏋️‍♂️ Increased Voting Power

A crucial advantage of freezing AQUA is the vast increase in voting power across governance & liquidity voting!

The longer AQUA is frozen, the more of each ICE token is given. The longest possible lock is three years. For every 1 AQUA locked for a maximum period you will receive:

• 10 ICE tokens
• 10 governICE tokens
• 10 liquidity voting tokens (8 upvoteICE + 2 downvoteICE)

Upvote, downvote, and govern ICE all have the same voting power as AQUA. So a user locking 1 Million AQUA for the max of three years would receive:

• 10 million ICE
• 10 million governICE
• 8 million upvoteICE
• 2 million downvoteICE

That means their voting power increased 10 times compared to their state before freezing AQUA. ICE tokens distribute immediately when a user locks AQUA, instantly allowing for boosted votes across Aquarius products.

�� Melting ICE

As the unfreezing date of AQUA gets closer, ICE tokens melt! The action of melting means voting power decreases over time unless a user freezes more AQUA.

Melting occurs through Stellar’s native clawback operation. Aquarius can scan Stellar addresses & claimable balances for all four ICE tokens daily and burn a percentage of them. This mechanic allows Aquarius to reduce a user’s ICE holdings and any votes made, as AQUA tokens get closer to their unlock date.

As a simple example, a user locks 1000 AQUA into ICE for a max of three years, giving them 10,000 ICE. These ICE tokens will melt linearly over time as the AQUA unlock date approaches.

Every year, the user’s ICE holdings will reduce by 3000 until the amount of ICE tokens reaches 1000. So if the lock was made on 01/08/2022 for three years:

• The user would start with 10,000 ICE
• On 01/08/2023, they’ll have 7000 ICE
• On 01/08/2024, they’ll have 4000 ICE
• On 01/08/2025, they’ll have 1000 ICE

Once AQUA reaches the unlock date, and the amount of ICE tokens is equal to the number of AQUA tokens locked, the user can unlock their AQUA. At this time the user can claim the AQUA, and their ICE tokens will be burned immediately.

🚀 Launch & Smart Contracts

Over the last few months, we have been planning various Aquarius updates and releases. Some plans had to be changed — due to the huge changes coming to the Stellar network itself. With the native smart contracts arriving soon, we know they will play a core role in what lies ahead for Aquarius. Our team is closely following the SDF’s progress and exploring the WASM and Rust stack.

Since day one, Aquarius’s goal was to build a safe, resilient, and decentralized platform promoting liquidity and bringing value to users and ecosystem projects. The addition of smart contracts will help us finally achieve our goals in a decentralized fashion. Smart contracts will undoubtedly be the biggest change to the Stellar network itself, and while we don’t know all the details yet on how it will affect Aquarius, we are thrilled to see what comes next.

We’re excited for the community to start using ICE, changing how they use & interact with AQUA & Aquarius. We plan to launch ICE tokens in July 2022, so there’s not long to wait!

🗞 Subscribe & Follow

You can learn more and keep up to date with the team & community using the following links:

• Website
• Locker Tool
• Liquidity Voting
• Aquarius Governance
• Twitter
• Discord
• Reddit
• Telegram
• GitHub

ICE. The next stage of Aquarius was originally published in Aquarius / AQUA on Medium, where people are continuing the conversation by highlighting and responding to this story.

Aquarius Governance launched in November 2021, giving the community a tool to create & vote on proposals that affect the ecosystem. We saw five proposals created within the first three months, with three accepted, one rejected, and one cancelled due to low participation.

The accepted proposals allowed:

1. Ultra Stellar to become the first adopter of AQUA as a loyalty & rewards token within their products (Proposal 18)
2. Adjustments to be made to Airdrop #2, with the locker tool also introduced (Proposal 19)
3. A 50% boost to upvotes placed on markets paired with AQUA on the SDEX & AMM reward voting tool (Proposal 22)

🔍 Observations

Although governance worked, both the Aquarius team & community could see the system was not reaching its full potential. Some issues noticed were:

• Low participation in proposal discussions
• Proposal creators unavailable to explain further details on their proposals
• No way for creators to edit a proposal once submitted
• Fewer than expected proposals, potentially due to fees
• Last-minute voting on proposals making it unclear how the community actually felt for the majority of a proposal’s voting lifespan

We knew these issues could all be improved with the correct implementations, so we temporarily suspended governance, giving us the time to work on upgrading the current system.

Today we are proud to announce the completion of the upgrades and warmly welcome you to Aquarius Governance v2.0, a brand new way to create, edit, and discuss proposals! Take a read below to learn all about the new features.

🧑‍⚖️ Governance v2.0 Upgrades

1 — Discussion Phase

Although discussions were present on our social channels previously, talks weren’t essential before a proposal’s creation. Having the community discuss ideas allowed for more well-formed proposals and gave creators time to make adjustments if the community weren’t entirely behind their ideas.

As such, governance now includes a mandatory seven day discussion phase, which starts upon creation. Putting a proposal up for discussion is vastly cheaper than a full proposal publication and encourages creators and the community to discuss proposals before publishing for a community vote.

This new feature means creators can:

• Get feedback before publishing
• Judge if any edits are needed to strengthen a proposal
• Decide not to proceed if there is little support

2 — Editing

If feedback suggests possible changes to a proposal, creators can now edit their proposals inside governance!

Upon proposal creation, a thirty-day countdown activates for final publication or any edits the proposal might need. Each edit is treated as a new proposal submission and restarts the thirty days, allowing extra time for further discussions. If no edits happen within the thirty-day window or publication doesn’t occur, proposals expire and become finished.

Voters can navigate through all proposal versions to see how they have changed over time. We hope to see more detailed proposals with this new feature, strengthened by community participation in the discussion phase.

3 — Fee Structure

The fee structure has changed to complement these features. The overall cost to create and publish a proposal stays the same, but instead of one fee to publish a proposal straight to a vote, there are three fees as follows:

• Creation — 100,000 AQUA
  Creation enables the new discussion phase, allowing talks to happen before the creator pays the full fee for publication. This fee is 10% of the 1 million AQUA needed for publication if no edits are required.
• Editing — 100,000 AQUA
  Editing incurs a fee to encourage better initial proposals while also lowering the chance of constant changes to a proposal. If too many edits occur, voters can quickly lose track of what a proposal stands for.
• Publication — 900,000 AQUA
  Publication allows for an AQUA community vote for the proposal. This final stage is how the previous system worked and activates “for” & “against” voting against a proposal.

Any proposals that pass with more than 50% of “for” votes & are over the 5% participation threshold will see their creators rewarded with 1,500,000 AQUA.

4 — Vote Lock Periods

Under v1.0, AQUA used for governance votes would unlock at the end of a proposal’s voting period, regardless of when a user voted. Unlocks no longer happen this way with v2.0!

Instead, AQUA now unlocks based on how quickly a vote occurs after a proposal is published. The unlock logic takes the time difference between a proposal’s start time and when a vote occurs and multiplies it by two. This multiplied time is added to the end of a proposal’s vote period, giving a final unlock time.

Example:

A proposal goes live on May. 1, 00:00 UTC for 7 days, so voting ends May. 8, 00:00 UTC.

One user votes immediately on May. 1, 00:00 UTC. No multiplier is given and their AQUA unlocks on May. 8, 00:00 UTC.

Another user votes 3.5 days into the vote on May. 4, 12:00 UTC. The 3.5 days are multiplied by 2, giving 7 days, and this is added to the voting end time. This user’s AQUA unlocks on May. 15, 00:00 UTC.

The shorter unlocking time for early voters encourages earlier participation in proposal voting, which benefits the whole governance process! This adjustment means the community has a better insight into how votes are going and see if proposals are likely to reach quorum ahead of the deadline.

So remember, the quicker you act on a proposal, the sooner your AQUA will be available once a vote ends.

5 — Layout Redesigns

Our final goal was to redesign the layout, allowing for better navigation of proposals. You can now review past and present proposals using the active, under discussion, and finished tabs.

We have also introduced a card view for each proposal, showing crucial information and stats at a glance! A preview of each proposal is viewable, and any extra information displayed will depend on the current stage of the proposal.

• Proposals in discussion show the creation date, last edit date, and discussion channel.
• Active proposals show when voting ends, live results, and the discussion channel.
• Finished proposals show when the vote ended, the final results, and the overall participation rate.

🚀 Launch

Governance 2.0 is live and ready for your ideas at gov.aqua.network! We hope you enjoy the upgrades and look forward to seeing all future discussions.

For the complete guide to governance, ensure to head over to our Aquarius Governance medium article.

We have one more announcement for those who have made it this far through the article. Governance wasn’t the only upgrade we were working on through Q2, with us previously teasing something nICE was coming soon. Now Gov 2.0 has launched, the wait is almost over for us to reveal everything about the incoming upgrades!

Stay tuned for next Friday (May 27) for the transformation of Aquarius, and discover more about these nICE developments!

🗞 Subscribe & Follow

You can learn more and keep up to date with the team & community using the following links:

• Website
• Liquidity Voting
• Aquarius Governance
• Twitter
• Discord
• Reddit
• Telegram
• GitHub

Launching Governance v2.0 was originally published in Aquarius / AQUA on Medium, where people are continuing the conversation by highlighting and responding to this story.

Discord is a powerful way for the community to share ideas with fellow members and the Aquarius team. About two months ago, a community member came forward with an idea on how the SDEX rewards engine could be improved. We reviewed the concept and believed it a viable option to improve SDEX rewards, so we decided to implement it and test whether the idea worked as intended.

On February 11th, we started testing the new SDEX rewards engine v2 to see how it compared to the original v1 engine. We ran both versions simultaneously for the nine days of testing, allowing us to see the difference in reward distribution.

We used seven markets for testing. They were:

• XLM / AQUA
• BTC (ultrastellar.com) / USDC
• ETH (ultrastellar.com) / USDC
• AQUA / yXLM
• AQUA / USDC
• XLM / USDC
• XLM / yXLM

Once testing started on these markets we began analyzing the data and noticed an immediate improvement in SDEX reward distribution with v2. We saw some wallets, who have been taking advantage of the more simplistic formula for v1, immediately have their rewards reduced by up to 80% in some cases. We also saw an increase of available market liquidity on the test markets and an increased number of users receiving rewards for their contribution towards order books.

⚖️ How is v2 different from v1?

v1 used a simple formula to work out rewards by diving hourly rewards between users based on:

• Who has an AQUA trustline
• Has an offer been on the SDEX for at least 12 ledgers (~60 seconds)
• The volume created from eligible offers taken by others

All eligible users would then share the hourly reward based on the generated volume.

v2 uses a more complex formula to work out rewards for market makers on incentivized markets, taking into account:

• Who has an AQUA trustline
• The size of each offer on a market
• Duration of time an offer remains in the order book
• How close an offer is to an order books spread
• Offers fulfillment percentage

The main difference between these engines is the actions that lead to a reward. v1 mainly focused on volume created each hour by a user, meaning the more volume someone made, the higher their reward. v2 instead focuses on multiple combined factors contributing to useable liquidity on the order books. With volume in an offer, spread distance, duration, and fulfillment all main factors, v2 creates a fair distribution to those who make liquid markets.

There is no need for a user’s offer to be partially or fully filled to be eligible for rewards with the v2 engine. Just placing and holding offers on an eligible market’s order book allows users to receive SDEX rewards for contributing towards market liquidity. Any offer can earn a reward due to v2 accounting for an offers placement in the order books. Offers closer to a market’s spread get significantly more rewards than orders placed further away, meaning more users can receive rewards.

The 12 ledger minimum rule has also been removed. Those who place an order and have it quickly taken from the order book will see a lower reward naturally, so we don’t need this limitation anymore.

👀 What improvements did we see?

Reduction in wash traders receiving rewards.

Some users realized they could get more rewards purely by trading assets between their wallets, as v1 incentivized volume creation. This action led to these users taking most rewards even when not providing meaningful liquidity to markets.

These market makers may have provided liquidity for around 90% of the time due to the 12 ledger minimum, but the volume created was unrealistic and not aligned with the goal of creating market liquidity.

We followed around 20 Stellar wallets flagged as creating unrealistic volume during our tests to see how their rewards differed between the two engines.

We compared rewards they received from v1 & v2, distinguishable by the adjusted Memo text, and noticed similarities with these wallets. On average, they had a 70–80% reduction in rewards received via v2 compared to v1. The screenshot below shows one of these accounts as an example.

Increase in users receiving rewards.

We also saw v2 rewarded more genuine market makers who place and hold liquidity on markets, including many who hadn’t received rewards before. The inclusion of an offers placement in relation to the spread with v2 allows any offer in the order book to receive a reward, not just those taken.

Many new eligible wallets previously had offers in order books but received no reward due to little volume, even when close to the spread. It was great to see v2 allowed these users to receive rewards for their provided liquidity compared to v1.

The increase in reward distribution can be seen in the graph below. On February 17th, 11,638 payments were made to eligible receivers of v2 rewards vs. 4,149 payments to those eligible for v1.

Increase in market liquidity

All seven markets chosen for v2 tests received a considerable increase in offers being placed and held for others to take when markets moved.

For example, before SDEX rewards v2 testing BTC (ultrastellar.com) /USDC (centre.io) had an order book value of ~$30,000 for both assets near the spread. This figure increased to a value of $125,000 for both assets, with offers placed closer to the spread during testing.

These increases were also seen on other test markets, showing how v2 can significantly increase usable liquidity for SDEX users.

⚙️ Why are we upgrading & when?

After nine days of testing, the team and the community were pleased with the results. Its clear v2 is a fairer system, allowing users to place liquidity on markets for others to take with the opportunity to earn AQUA rewards for their contribution to markets. You can read more of the feedback in the #sdex-reward-discussions section of our official Discord.

We will permanently upgrade to the SDEX rewards engine v2 from March 4th, 2022.

There are no changes to the SDEX & AMM reward allocations, only the SDEX reward distribution engine will change. All markets within the reward zone will start earning SDEX rewards based on the v2 rewards engine, with v1 deprecated.

🗞 Subscribe & Follow

You can learn more and keep up to date with the team & community using the following links:

• Website
• Liquidity Voting
• Aquarius Governance
• Twitter
• Discord
• Reddit
• Telegram
• GitHub

Upgrading Aquarius SDEX rewards was originally published in Aquarius / AQUA on Medium, where people are continuing the conversation by highlighting and responding to this story.

It’s only been three months since Aquarius liquidity rewards went live, with their effects on market liquidity visible. In response, many projects looked for ways to attract more votes from AQUA holders, moving market pairs up the Reward Zone helping increase hourly AMM & SDEX rewards.

The most popular technique has been “bribes”. The term bribe has been used in various DeFi communities for a while to describe the practice of buying votes.

Bribes offer a way for voters to earn incentives just by voting, with no need to place funds at risk inside of AMMs or order books. Essentially, bribes offer another utility benefit to AQUA holders.

The current state of ecosystem bribing

As voting happens on the blockchain with all data public and verifiable, any project can start tracking and rewarding wallets who vote for their markets. Open, traceable data is why bribes exist in similar ecosystems on other networks.

The projects that wish to offer bribes need to invest time & effort building tools in tracking Aquarius voters and distributing bribes accordingly. A few projects came up with the implementation of bribes, but there are dozens more that can not afford to spread their resources building add-ons for Aquarius. Also, nobody benefits from having multiple projects re-invent the wheel and roll their own implementation of bribes functionality.

So, how can Aquarius adapt & incorporate bribes into the ecosystem, create a fair playing field for all projects, improve AQUAnomics, and make Aquarius more attractive for Stellar projects to adopt?

🎁 Aquarius Bribes

We have brought bribes native to the Aquarius protocol, allowing everyone to view voting incentives all in one place. At the same time, through a simple interface, anyone can quickly set up and distribute bribe rewards on desired markets.

Discover Aquarius Bribes at vote.aqua.network/bribes

The key advantages for bringing bribes native to Aquarius are:

・Inclusivity — Reduced complexity to implement bribes! Aquarius provides all the resources to select and deploy bribes to markets. Any project can now offer bribes by spending less than 5 minutes.

・No extra coding — There is no need to build complex vote tracking and distribution logic into projects. Bribes can be created directly from the Aquarius interface without coding at all.

・Open participation — Anyone can get involved. Projects and users can quickly and effectively deploy bribes in a few simple steps using the permissionless, automated process.

・Guarantees for voters — Using Aquarius bribes guarantees distribution to users. Currently, projects can promise bribes but later stop or reduce them, meaning voters might lock AQUA for prolonged periods but end up with lowered or no rewards.

・Transparency and visibility— Aquarius Bribes will be visible to users on vote.aqua.network, making it easy to compare all bribe offerings, including the details on bribe amounts and their schedule.

・Flexibility — Any Stellar asset can be used as a bribe. Projects could use their token to provide bribes or use popular assets such as XLM or USDC. Even a mixture of tokens can be used as there is no limit to the number of tokens that can get assigned per market.

How bribes work

Using the interface, users allocate bribes to their chosen markets by selecting a market, the size of rewards, and the time period for the bribe.

From a technical standpoint, creating a bribe initiates a new claimable balance payment. The claimable balance has two Stellar wallets as claimants. One of them is the Aquarius bribe collection address, with the second being the indicator towards which market the bribes inside the claimable balance get allocated. It is also possible to schedule bribes in advance (e.g., several weeks ahead). Such schedules are also enforced on-chain through the use of timestamp predicates.

Every week on Sunday, the Aquarius bribe collector will claim all available claimable balances for the coming week. The Aquarius bribe collection address distributes all collected bribes to voters through the following Monday-Sunday.

The flow for voting will stay mostly the same. If a user decides to vote for a market pair offering bribes, they should expect to get their share of voting rewards daily.

Multiple tokens can get assigned as bribes for a market. Since bribes get delivered through standard Stellar payments, a user can choose not to accept certain bribe tokens by not making a trustline to the token.

♒️ Minimum bribe size & AQUA conversion

There is a minimum requirement for a bribe value to ensure bribes provide meaningful voting incentives and protect voters from volatility.

The bribe collector will only accept bribes that have a value of at least 100,000 AQUA, ensuring that the minimum daily bribe budget for the voters is at least 14,285 AQUA.

When bribes are collected, Aquarius will make a path payment, converting part of the bribe into 100,000 AQUA. The purchased 100K AQUA + the remainder of the chosen reward token will be distributed to voters.

If Aquarius can’t convert to at least 100,000 AQUA, the bribe collector will reject the bribe as it’s too small. Instead, Aquarius will send the bribe back to the sender, and no reward will be visible on the Aquarius voting website.

Say there are 1,000,000 XYZ tokens offered as a bribe.

If it takes 100,000 XYZ to buy 100,000 AQUA, there will be 900,000 XYZ left for Aquarius bribes to distribute to voters. The 100,000 AQUA will also be distributed to voters of the same market, effectively guaranteeing a minimum bribe value for voters in AQUA and protecting against the volatility of XYZ token.

This process creates a min value threshold for those who wish to offer bribes and acquire more visibility on Aquarius and helps protect against spam and dust bribe offers.

🚀 Launch information & promotion!

We have already launched the website, which users can find at vote.aqua.network/bribes.

Aquarius Bribes will start to distribute from February 28th, with projects already able to prepare bribes in advance.

As a launch bonus, we have dedicated 10 Million AQUA from the team’s wallet to promote bribes within the ecosystem! Every time a valid bribe for a NEW market pair gets created, we will add 100,000 AQUA bribe on top until the 10M AQUA runs out. That means the first 100 markets to have bribes initiated on them will receive an extra 100,000 AQUA bribe.

🗞 Subscribe & Follow

You can learn more and keep up to date with the team & community using the following links:

• Website
• Liquidity Voting
• Aquarius Governance
• Twitter
• Discord
• Reddit
• Telegram
• GitHub

Introducing Aquarius Bribes was originally published in Aquarius / AQUA on Medium, where people are continuing the conversation by highlighting and responding to this story.

Lock AQUA for up to 3 years to receive a multiplier on your airdrop reward.

Last month the community voted to accept proposal 19, changing how airdrop #2 functions. One of these changes was the chance to lock AQUA for up to 3 years, giving the opportunity of receiving up to a 4x multiplier for an eligible wallet’s airdrop reward.

This tool is now live for everyone to use! You can find it at locker.aqua.network.

Let us take you through how to use the tool.

♒️ Airdrop #2 Locker Tool

Once you have navigated to the website, you can see the option to check your account. Please enter your public key and click Let’s Start.

The website will then present you with the estimated rewards for your wallet. Not only is this a locker tool, but it is also an updated eligibility checker. This tool will take into account all XLM, yXLM & AQUA held inside your wallet and AMM pools you participate in to predict your airdrop #2 reward.

💼 Portfolio

The portfolio section will show you the current balances of AQUA, XLM, and yXLM inside your wallet. Also included is the amount of AQUA, XLM, and yXLM you have inside of AMMs.

🎁 Expected Airdrop #2 reward

This section shows you two estimated figures. The greyed-out AQUA symbol shows the expected reward without any AQUA placed inside the locker tool.

The purple AQUA symbol shows the increased expected reward due to the AQUA you have locked inside of the tool.

You can then see the breakdown of the expected three-year total and the expected reward per month and year.

🔓 Lock your AQUA

So this is where you can lock AQUA to increase your airdrop reward by up to 4 times. All you need to do is choose how much AQUA to lock and for how long. Use the sliders or boxes to fill in precisely.

Once you choose, you’ll see your new expected 3 year reward. If you are happy, proceed to Lock AQUA.

🔐 Current locks

In this section, you can see the breakdown of AQUA locks you have made using the tool.

💬 What’s Next

Once you decide to lock AQUA or not, you can sit back and relax until the snapshot on January 15th at 00:00:00 UTC. Once the closest ledger to the snapshot time passes, the airdrop will be locked in, and we can start calculating final airdrop rewards.

We aim to have distribution sorted by February as initially intended, but delays may happen due to the change of the snapshot date.

Don’t forget you can also use your AQUA to vote and incentivize liquidity provision on Stellar via our voting website vote.aqua.network. Markets in the reward zone receive hourly rewards, which are distributed to all eligible liquidity providers.

You can learn more and keep up to date with the team & community using the following links:

• Website
• Twitter
• Discord
• Reddit
• Telegram
• GitHub

Find out if your exchange is airdropping AQUA to XLM holders.

A snapshot of the Stellar blockchain on January 15, 2022, at 00:00:00 UTC, decides who is eligible for AQUA Aqidrop #2. Eligibility gets decided on the base criteria of a wallet holding a minimum of 500 XLM/yXLM and at least 1 AQUA. The more XLM, yXLM, and AQUA a wallet holds, the higher the airdrop reward.

All the details can be found in our medium article, Announcing AQUA Airdrop #2.

Exchanges have the option to take part in the airdrop, with a few changes to the rules due to the amount of XLM they can hold for their users. If an exchange registers their wallets with Aquarius, we lift the 10 Million AQUA cap on their wallets that hold at least 1 AQUA at the time of the snapshot.

Users of participating exchanges only need to hold XLM on the exchange to be eligible for the airdrop, as the exchange’s Stellar wallets hold 1 AQUA to signal the airdrop on chain. This also means exchange users can hold less than 500 XLM, as exchanges will distribute proportionally to their users. Exchanges will distribute AQUA to their users in accordance with their internal snapshot of users’ XLM holdings on January 15, 2022, at 00:00:00 UTC.

Exchanges can reach the Aquarius team at airdrop@aqua.network if they would like to participate. Participating exchanges will distribute AQUA to their users according to their balances on their exchange at the snapshot time. Aquarius will distribute equal portions of total airdrop rewards in intervals over three years.

💱 Participating Exchanges

GOPAX

Website

Announcement

UPbit

Website

Announcement

Coinone

Website

Announcement

Bithumb

Website

Announcement

ProBit

Website

Announcement

Liquid

Website

Announcement

MEXC

Website

Announcement

Hanbitco

Website

Announcement

AAX Exchange

Website

Announcement

🗞 Subscribe & Follow

You can learn more and keep up to date with the team & community using the following links:

• Website
• Twitter
• Discord
• Reddit
• Telegram
• GitHub

Aquarius aims to be a decentralized protocol within the Stellar ecosystem, with AQUA token holders being the drivers on where liquidity flows, how DAO funds get used, and how the protocol is modified. One crucial piece was missing from the puzzle for this to happen: governance.

We proudly announced & launched Aquarius Governance in November 2021, providing a way for the community to create proposals and change how the protocol can work.

🧑‍⚖️ How Governance Works

Aquarius Governance allows AQUA holders to change how the protocol should work through proposals and voting wallets. Anyone can put forward a proposal for the community to vote on, but keep in mind that if the proposal doesn’t benefit the Aquarius or Stellar ecosystem, AQUA holders are unlikely to vote for it.

Proposal publications work in two parts:

1. Part one is a mandatory 7-day discussion phase held mainly in the Aquarius discord server. During this time, creators can gather opinions on the proposal before making further edits, submitting it for final publication, or even deciding not to proceed if the proposal seems unpopular.
2. Part two is the publication phase. After seven days of discussion, creators can immediately publish the proposal for voting or continue discussions and editing for up to 30 days. Every edit is treated as a new proposal and renews the 7-day discussion & 30-day publication phases. If a proposal isn’t published within 30 days of creation or the last edit, it will become finished.

💲Fees & Rewards

The following fee structure applies when creating, editing, or publishing a new proposal:

• Creation — 100,000 AQUA
• Editing — 100,000 AQUA
• Publication — 900,000 AQUA

The proposal creator pays all fees to the AQUA issuer wallet, burning them out of existence and creating a deflationary effect. Charging a fee ensures proposals and any edits are well-thought-out before proceeding to publication.

A reward of 1.5 million AQUA is given to the creators of proposals that reach quorum & gain more than 50% of “for” votes! That means creators can get back the 1 million AQUA paid in creation & publication fees and up to a 500,000 AQUA bonus if no edits are needed.

✅ Validity & Quorum

Thanks to the discussion phase, greater community engagement can be achieved as creators and the community discuss the pros & cons of each proposal. These talks are essential as a quorum of 10% of the current circulating AQUA + ICE supply is needed for a proposal to become valid.

For example:

If the total circulating supply of AQUA and ICE is 10 billion, then 1 billion worth of AQUA and ICE votes (10%) is required for a proposal to be deemed valid.

A proposal could have a unanimous “for” vote count, but if it has less than 10% voting participation, it will be automatically rejected due to not meeting the validity threshold.

This requirement reduces the likelihood of proposals with minimal community interest being implemented.

🌐 gov.aqua.network

To access Aquarius Governance, head to gov.aqua.network.

Here you can browse through all proposals past & present, and if you choose, sign in to vote & create new proposals using AQUA. Sign in is available using WalletConnect, Stellar Laboratory & secret key, although we will deprecate the secret key method in the near future.

🗳 How to vote

Once logged in, you can view various available proposals and vote for or against active proposals with your available AQUA.

All AQUA used for voting is locked until voting ends using claimable balances.

The unlock time for AQUA governance votes depends on how quickly a vote occurs after a proposal is published. The unlock logic takes the time difference between a proposal’s start time and when a vote occurs and multiplies it by two. This multiplied time is added to the end of a proposal’s vote period, giving a final unlock time.

For example, a user who votes 3.5 days into a voting period will have those days multiplied by 2, giving 7 days. Therefore the AQUA used to vote will unlock 7 days after the proposal vote ends.

📜 New proposals

The ability to create new proposals is also available for those who have ideas they think the AQUA community will like. The process starts by clicking the Create Discussion + button on the home page.

Next, choose a title for the proposal and fill the content section in a clear and detailed way. Be advised that creators of proposals should also provide a feasible technical plan to show how the idea’s implementation can happen. Aquarius can remove unrealistic proposals with no plan.

The option to add a Discord discussion has also been implemented into the proposal process. Creators can ask the Aquarius Discord admins to start a channel before submitting their initial proposal. Once done, creators can add the channel URL, provide the name for the proposal’s discussion channel, and add their Discord nickname for better communication with the community.

Once completed, click next to preview the proposal and start your final checks before submission. The proposal can be submitted to the discussion phase for 100,000 AQUA if everything is fine.

The proposal will then enter the mandatory 7-day discussion phase. During this time, you can gather the community’s thoughts on the proposal and make edits if necessary. Each edit costs 100,000 AQUA, with a new version of the proposal submitted for the community to view.

Discussions and editing can continue for up to 30 days, with the option to publish for community voting unlocking after seven days. Keep in mind that every edit is treated as a new proposal submission, renewing the 7-day discussion phase & 30-day publication phase.

Final publication cost 900,000 AQUA, with creators able to run voting from three to seven days. If the publication isn’t made within 30 days of creation or the last edit, the proposal will become finished.

Once voting has run and the results are in, the developers and the Signers Guild will act upon the proposal if it passes and start work on the implementation and distribution of rewards.

🛡 Aquarius Signers Guild

In November 2021, we announced the Aquarius Signers Guild. The guild is decentralized and made up of various members of the Stellar ecosystem. Members of the guild are the ones who control and sign funds from the Community DAO Fund when proposals call upon it.

This global team acts upon proposal votes, ensuring that Aquarius is always moving forward with no need for a single centralized project to execute the communities wishes.

🗞 Subscribe & Follow

You can learn more and keep up to date with the team & community using the following links:

• Website
• Liquidity Voting
• Aquarius Governance
• Twitter
• Discord
• Reddit
• Telegram
• GitHub

Aquarius Governance was originally published in Aquarius / AQUA on Medium, where people are continuing the conversation by highlighting and responding to this story.