Renting liquidity

Part of a series covering all 72 Ekubo DAO proposals. This post covers paying other people to provide liquidity — the most contested category in the archive, with four of twelve proposals failing.

Period covered: May 2025 – April 2026.

Wave zero

May 2025 — Prepare funds for Ethereum deployment incentives moved 18,750 EKUBO to fund the first of four planned three-month packages, targeting USDC-USDT, ETH-USDC, ETH-WBTC and WBTC-cbBTC with rewards split equally.

Then came the most oddly specific proposal in the archive. The DAO’s own USDC/USDT positions were excluded from earning rewards but included in the APY displayed on the interface — so the UI showed an APY roughly 50% too low, discouraging exactly the deposits the campaign was paying for.

The fix was to double the pool’s rewards so the DAO’s positions could stop being excluded, making the displayed APY correct. It took two attempts — the June 5 version failed, the June 10 version passed with essentially the same text.

Spending 4,687.5 EKUBO to fix a number on a webpage sounds absurd until you notice the number was the product. An incentive campaign’s entire mechanism of action is the APY an LP sees before depositing.

Buying someone else’s incentives

The most creative allocations here don’t pay Ekubo LPs at all.

In June 2025 the DAO began bribing Liquity’s PIL votes — again on the second attempt, after the June 12 version failed. 11,000 USDC bridged, swapped to BOLD, spent at $1,000 per week for 11 weeks. The BOLD incentives received in return were then paid to Ekubo’s BOLD/USDC LPs.

August 2025 renewed it: 13,000 USDC for epochs 18–30, with rewards spread equally across BOLD/USDC, EKUBO/BOLD and LQTY/BOLD.

This is Ekubo participating in another protocol’s vote market to redirect that protocol’s emissions to Ekubo’s pools — spending $1,000 to receive more than $1,000 of BOLD, and paying it out as Ekubo LP rewards. It is the same logic that Ve33 later productises: the right to direct emissions has a market value, and buying it can be cheaper than funding equivalent rewards yourself.

Wave one, and the scale of it

August 2025 — Incentivize Ethereum liquidity wave 1: 36,500 EKUBO over three months across eleven pairs, from 40 EKUBO/day on ETH/USDC and ETH/USDT down to 20/day on the long tail, plus mev-resist pool types.

December 2025 — Incentivize Ekubo V3 Liquidity on Ethereum: 30,940 EKUBO across thirteen pairs, starting as soon as V3 was live.

Thirteen pairs at 20–60 EKUBO per day each is a wide, flat allocation. It is also exactly the criticism the Ve33 post makes of fixed campaigns: the budget and the split are decided up front, and the split cannot respond when volume moves. Ekubo ran these campaigns and then built a mechanism to stop having to.

Where it broke down

March and April 2026 are a bad run: three consecutive incentive proposals failed.

Additional Ethereum pool incentives (250 USDC/day to ETH/USDC for three months) — failed. Arbitrum deployment incentives (0.077 ETH per pair per day via Boosted Fees) — failed, on the same day. Continue Incentivizing Ekubo V3 Liquidity (36,400 EKUBO plus 50,050 USDC across ten pairs) — failed on April 1.

Six days later, Ethereum USDC Incentives passed — and it is a different proposal in one specific way.

Due to the low price of EKUBO, this proposal distributes incentives in USDC only, which should attract more liquidity than an equal amount in EKUBO while also alleviating supply-side pressure on the token.

91k USDC total, four pairs only — ETH/USDC at 550 USDC/day, and ETH/WBTC, WBTC/USDT and ETH/USDT at 150 each. Narrower, denominated in dollars, and explicitly scoped to “high swap fee-paying pairs”.

Two changes at once: stop paying in your own token, and stop spreading thin. The reasoning connects to EKUBO Liquidity Support the day before, which measured a 15% price impact on a $10k EKUBO trade and noted that incentives paid in EKUBO “are less attractive and not scalable”. A reward token that moves 15% when you sell it is not worth its quoted value, so an LP discounts it — and the DAO pays more in nominal terms for less real incentive, while adding sell pressure to the token it is also buying back.

The proposals

Next: upgrades, bugs and a recovery fund.