Author: Sperax Core Team
Created: November 24, 2023
Labels: SPA-Gauge, veSPA-emissions, Demeter
Summary
In 2023, SperaxDAO launched SPA Gauge to increase USDs liquidity and facilitate deeper concentrated liquidity of new tokens with USDs. The ecosystem experienced some growth during the early days. Lately, liquidity has moved out of the ecosystem, and the SPA gauge has been unsuccessful in retaining any liquidity either for USDs or Demeter.
Motivation
- Since the launch of SPA Gauge, Sperax treasury has emitted over half a million dollars to Demeter farms. The Demeter and USDs TVL has halved in the last five months.
- The target is to increase USDs adoption, which will help grow the Sperax ecosystem and benefit its participants. We must rethink our reward mechanism to direct emissions.
Overview
Apart from maintaining the target to make SPA deflationary, SperaxDAO should ensure that the emissions have a direct effect on increasing the ecosystem TVL. It should also be recognized that with increased TVL, the reward rate should also increase to facilitate larger deeper liquidity. Upon reviewing the performance of the SPA Gauge, the sperax team has decided to propose the closure of the SPA Gauge.
The xSPA, currently being emitted as bribes, will be directed as emissions for veSPA holders (As has been the case before the launch of SPA Gauge). Earlier, we executed a reduction in bribes by 20% through SIP-56. The current bribe amount is 306840 xSPA tokens. We propose to increase the emissions amount by 25% to 383550 xSPA tokens.
Following the principle of proportionating emissions with USDs and SPA holdings, the APR for any farm should directly depend on the SPA or USDs holdings in the farms. Also, the APR should change(increase) as the SPA+USD holdings increase. We propose to implement the following methodology to identify the APR for any farm.
| Range start (in $) | Range ends (in $) | Range APR |
|---|---|---|
| 0 | 5000 | 0.00% |
| 5001 | 20000 | 7.50% |
| 20001 | 100000 | 15% |
| 100001 | 250000 | 20% |
| 250001 | 500000 | 25% |
| 500001 | 1000000 | 30% |
| 1000001 | 2000000 | 35% |
| Above 2000000 | 40% |
For example, any farm having a liquidity of $330,000/- in (USDs+SPA) will have the following APR
*APR = [{(330000-250000)*25 + (250000-100000)*20 + (100000-20000)*15 + (20000-5000)*7.5 +(5000-0)0}/330000] = 19.12%
And if any farm has a liquidity of $830000/- in (USDs+SPA) will have the following APR
*APR = [{(830000-500000)*30 + (500000-250000)*25 + (250000-100000)*20 + (100000-20000)*15 + (20000-5000)*7.5 +(5000-0)0}/830000] = 24.53%
For any SPA/USDs farm the APR will be 5 times the APR calculated through the methodology. As per the new methodology, the expected APR for the farms eligible for emissions is mentioned below.
| Farm | TVL | New APR |
|---|---|---|
| USDC/USDs Uniswap v3 | $298,108.09 | 15.39% |
| USDs/USDC.e Uniswap v3 | $269,631.67 | 14.90% |
| PLS/USDs Uniswap v3 | $140,070.88 | 12.32% |
| USDs/USDC.e Camelot | $277,804.29 | 15.05% |
| plsSPA/SPA Uniswap v3 | $268,357.61 | 14.88% |
| SPA/USDs Camelot | $102,895.92 | 68.12% |
| SPA/USDs Uniswap v3 | $93,722.42 | 66.10% |
| fxUSD/USDs Uniswap v3 | $45,482.55 | 12.60% |
| WETH/USDs Uniswap v3 | $17,335.52 | 7.50% |
| ARB/USDs Uniswap v3 | $5,977.52 | 7.50% |
The emission will be decided every week on Wednesday based on the average daily holding of the past seven days.
Technical Specifications
- SPA Gauge will be closed
- xSPA bribes will directed to veSPA emissions with an increment of 25%.
- Demeter farm emissions will be calculated based on the new methodology
Voting
- For: Close SPA gauge, redirect emissions to veSPA, and implement new emissions methodology
- Against: Do not close the SPA Gauge
- For
- Against