SIP-3: Redirect Farm Emissions to USDs - USDC pool

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Voting window will begin 7/20/22 at 7:30PM ET and run through 7/23/22 at 7:30PM ET.

SIP-3: Redirect Farm Emissions to USDs - USDC pool

Author(s): Sperax Core Team

Reference: Mentioned in recent AMAs

Created: Jul 18, 2022

Labels: #LiquidityMining

Simple Summary

Redirect 20% of daily emissions from the USDs - SPA farm to a new APR USDs - USDC farm.

Abstract

To ensure adequate liquidity for peg stability, the Sperax team is proposing to launch a new incentive for users to park liquidity into the USDs - USDC Uniswap pair on Arbitrum. Instead of adding to the daily emissions, we propose to redirect emissions from the existing USDs - SPA pool to this new one.

Motivation

To ensure USDs keep it’s peg, there must be adequate liquidity on DEX’s to ensure arbitrage is profitable. We could launch a new farm which would require additional SPA emissions, and potentially SPA sell pressure, or we could redirect from the existing USDs - SPA farm. We propose to redirect instead of adding to emissions.

Overview

Currently the Reward Rate for the SPA-USDs farm is

  1. For all users (lockup+no lockup) = 466.663K SPA/Week
  2. Additional reward rate for lockup users = 233.331K SPA/Week

20% of this pool will be redirected to the new farm to incentivize USDs - USDC liquidity.

So reward rate for the new USDC-USDs farm will be

  1. For all users (lockup+no lockup) = 0.2 * 466.663K SPA/Week
  2. Additional reward rate for lockup users = 0.2* 233.331K SPA/Week

New reward rate for the existing SPA-USDs farm will be

  1. For all users (lockup+no lockup) = 0.8 * 466.663K SPA/Week
  2. Additional reward rate for lockup users = 0.8* 233.331K SPA/Week

Technical Specification

Sperax team will use the Multisig to redirect rewards from the USDs - SPA pool to the USDs - USDC pool. To fund this pool 20% of the daily emissions will be redirected from the existing pool to the new pool. There will be 93,332 SPA/Week going to all users and an additional 46,662 going to lockup users as a bonus. This number was calculated by taking the weekly reward of the current farm for all users 466,663 *0.2 and the weekly lockup bonus of 233,331 *0.2.

  • Yes
  • No

0 voters

1 Like
2

Keeping liquidity and arb incentive/effectiveness is imperative. I support this proposal.

2 Likes
3

Liquidity in the USDs/USDC pool is as important for the protocol as the SPA/USDs pair and in the long term it is actually going to be more important. Having a new dynamic liquidity mining campaign for USDs/USDC is a good start.

1 Like
4

I can weigh in here. Without sufficient liquidity in the stablecoin pair, there is a risk that arbitragers won’t be arbing the price back to $1. Added liquidity will keep those arbers in the market and not rely just on USDs holders to be minting/redeeming for peg stability sake

1 Like
5

Great proposal. Sperax team should continue incentivising USDs/USDC LPs.