Author: Sperax Core Team
Reference: Sperax docs, SIP-32
Created: October 17, 2023
Labels: Liquidity-Mining
Summary
In 2023, SperaxDAO is taking significant steps to address two pivotal aspects: mitigating SPA emissions and augmenting the circulation of USDs. To achieve these objectives, the team is proposing protocol enhancement:
Decreasing SPA emissions from Demeter farms by 50% and curbing SPA bribes dispensed by SPA Gauge by 20%.
Motivation
Since the inception of Demeter, the Sperax treasury has emitted over $500K of SPA tokens. The emissions were to contribute towards increasing the overall ecosystem TVL. Although there are various factors affecting the TVL, the total Demeter TVL has dropped by more than 50% in the last 5 months.
Presently, SPA inflation remains relatively high, exerting selling pressure. In accordance with SIP-32, we aim to reduce inflation in 2023. We offer a 50% overall reduction in Demeter and Gauge emissions.
Overview
In 2023, SperaxDAO is committed to reducing unnecessary SPA emissions while simultaneously boosting the circulation of USDs.
Demeter farms currently emit 414500 SPA tokens per day, while SPA Gauge disburses 383,550 xSPA per week as bribes. The proposed solution involves reducing weekly emissions from the SPA Gauge by 50% and trimming the bribe budget by 20%.
The new bribe distribution for the farms is as follows:
SPA/USDs Camelot - 68186 xSPA/week
SPA/USDs Uniswap v3 - 68186 xSPA/week
USDs/USDC.e Uniswap v3 - 45357 xSPA/week
USDC/USDs Uniswap v3 - 45357 xSPA/week
USDs/USDC.e Camelot - 45357 xSPA/week
plsSPA/SPA Uniswap V3 - 34093 xSPA/week
Technical Specifications
To achieve an overall SPA inflation reduction of 25%, the proposal includes reducing SPA emissions from Demeter farms by 50% to 207250 SPA tokens per week.
Reducing bribes by 20% and redistributing it as mentioned in the overview.
Voting
For: Implement the proposal to reduce SPA emissions
Against: Develop an alternative proposal aimed at reducing inflation and enhancing the utilization of USDs
This proposal is aimed directly at decreasing incentives for the people who are aligned with the protocol long term. Short term fix, which won’t do anything positve in the long term. I have been max locking veSPA for a long time now, why do I feel like I’ve been tricked if this proposal passes?
It feels like you want to back up your choice of letting PlutusDAO take ahuge chunk of veSPA, becaus e now they are siphoning bigger part of the gauge rewards.
like whoever locked veSPA, ask yourself did you locked it because you have been waiting for your yield budget to be decreased by 20%? then I wouldn’t lock it in the first place… Also, this is illiquid position which requires risk taking, but the risk was taken in the first place by locking it, because it seemed like the rules won’t change much - this is why you lock it. But if you play with it, you play with strategy of people who locked SPA in the first place, and it won’t do anything good in the long run I can promise you that.
then decrease yield which goes to farms, at least you can liquidate the farm, you cannot do that with veSPA
also if you change the rules of the veSPA so intrusively then at least give an option to exit veSPA
so people could redefine rules of vote locking once again
I favour reduction of inflation. Inflation has been high for long. Stakers get reduced 20%, but Demeter 50% which turns inflation more in favour of staking which is ok. Currently, Demeter is emitting 11k dollars value in form of inflation per week which is too high for current market conditions. Xspa makes only delay of 6 months in inflation and no real reduction. We need both reduction and xspa.
@unicron lowering inflation will eventually benefit the long term stakers. I also propose to either completely switch the Demeter emissions to xSPA or split it in 20% SPA and 80% xSPA.