SIP-63 : Demeter 2.0 Launch

Governance proposals (discussed)
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1

Author(s): Sperax Core Team
Reference: Demeter 2.0, LTIPP, Incentives
Created: June 20th, 2024

Summary

Demeter protocol is a new protocol for DAOs to launch and manage decentralized exchange liquidity without knowing how to code.

Demeter 2.0 is an upgraded version of Demeter version 1. Demeter 2.0 will give the power to farm creators to launch incentivized farms on Camelot V3 and Uniswap V3. This proposal aims to allocate rewards for seven new farms being set up with the launch of Demeter 2.0

Motivation

  • Incentivise farms based on the TVL contained in one or more assets in the farm.
  • Configurable reward rate for all farms which Farm owners can manage
  • Better user experience and improved interaction with the interface

Overview

Protocols seeking to incentivize liquidity on Demeter often faced a challenge - a lack of direct correlation between increased incentives and increased liquidity. We’re introducing a new “Steady APR Farm” on Demeter 2.0 to address this. While the APR isn’t fixed, it will be more predictable than the current model. Reward token managers can set and adjust the APR based on the farm’s Total Value Locked (TVL), providing more consistent rewards for liquidity providers.

We’ve been selected for Arbitrum Foundation’s Long-Term Incentive Pilot Program (LTIPP). The Sperax DAO will receive 250,500 ARB tokens to distribute across seven new Demeter 2.0 farms by September 2nd.

Additionally, the Sperax DAO will match these ARB rewards with SPA and xSPA tokens, distributing a total of 32 million SPA within the LTIPP timeframe. Our goal is to reach a TVL of $20 million on Demeter and $10 million in USDs during the LTIPP.

The total TVL and emission targets are mentioned below in the table.

Week TVL (USD) SPA rewards (USD) Arb Rewards (USD) Rewards in SPA (for locked liquidity) (SPA price - $0.009) Rewards in xSPA tokens (SPA price - $0.009) Extra Rewards in ARB tokens (ARB price - $0.9)
1 1,000,000 4,808 4,808 106,838 427,350 5,342
2 1,400,000 6,731 6,731 149,573 598,291 7,479
3 1,960,000 9,423 9,423 209,402 837,607 10,470
4 2,744,000 12,665 11,873 281,436 1,125,744 13,192
5 3,841,600 17,730 14,775 394,010 1,576,041 16,417
6 5,378,240 23,788 18,617 528,630 2,114,522 20,686
7 7,529,536 31,856 24,616 707,905 2,831,620 27,351
8 10,541,350 44,598 32,435 991,067 3,964,269 36,039
9 14,757,891 56,761 42,571 1,261,358 5,045,433 47,301
10 20,661,047 79,466 59,599 1,765,901 7,063,606 66,221

APR will initially be set to 25% in ARB and 25% SPA/xSPA for the following farms on Camelot V3

  1. USDC/USDs
  2. USDC.e/USDs
  3. USDT/USDs
  4. wETH/USDs
  5. ARB/USDs
  6. wBTC/USDs

APR will initially be set to 25% in ARB and 75% SPA/xSPA for the following farm on Camelot V3

  1. SPA/USDs

As the total Demeter 2.0 TVL and farm TVL increase, the APR will be adjusted to optimize the rewards to achieve the TVL target. A new proposal will be presented to finalize the reward APR post the LTIPP timeline.

The daily reward rate can be changed based on total Demeter TVL and individual farm TVL. We will set the maximum rewards release per day every week. Keeping the target TVL in mind, the maximum rewards per day are mentioned below.

The daily reward rate can be changed based on total Demeter TVL and individual farm TVL.

Week Max ARB rewards per day Max SPA rewards per day Max xSPA rewards per day
1 763 15263 61050
2 1068 21368 85470
3 1496 29915 119658
4 1885 40205 160821
5 2345 56287 225149
6 2955 75519 302075
7 3907 101129 404517
8 5148 141581 566324
9 6757 180194 720776
10 9460 252272 1009087

USDs will be used as the base token for xSPA/SPA incentives and the pairing token (USDC, USDT, wBTC, etc) will be used as the base token for ARB incentives.

For the Camelot v3 pools, the price ranges are mentioned below.

Farms Min Price Max Price
USDC/USDs 0.95 USDs 1.05 USDs
USDC.e/USDs 0.95 USDs 1.05 USDs
USDT/USDs 0.95 USDs 1.05 USDs
wETH/USDs 2500 USDs 4500 USDs
ARB/USDs 0.6 USDs 1.3 USDs
wBTC/USDs 42000 USDs 78000 USDs
SPA/USDs 0.003 USDs 0.020 USDs

The users will earn fees APR in Grail and xGrail which is on top of the rewards APR.

Technical Specifications

  • Launch Demeter 2.0 and 7 new farms as stated in the overview
  • Allocate 32 million SPA tokens to be distributed in the first 10 weeks of Demeter 2.0
  • Allocate all LTIPP grants of 250500 ARB tokens in the first 10 weeks of Demeter 2.0
  • Release the incentives in the proposed order as mentioned in the overview

Voting
For: Implement SIP 63
Against: Do not implement this proposal

  • Yes
  • No
0 voters
2

@Sperax What would be the base asset on which APR would be calculated? Is it going to be just USDs for the USDs/USDC.e farm or both the tokens?
What are the price ranges where we are planning to incentivize liquidity for all the farms? Since it is Camelot v3, the price range should be there as well, no?
In case of Camelot v3, will the users also get the GRAIL and xGRAIL token rewards additionally?
Why is there an exorbitantly high APR for the SPA/USDs farm in the form of xSPA? And again what would be the base asset for this APR?

3

USDs will be used as the base token for xSPA/SPA incentives and the pairing token (USDC, USDT, wBTC, etc) will be used as the base token for ARB incentives.

Since all new Demeter 2.0 farms will be on camelot, we don’t need to set the price range on Demeter. And, for the Camelot v3 pools, the price ranges are mentioned below.

Farms Min Price Max Price
USDC/USDs 0.95 USDs 1.05 USDs
USDC.e/USDs 0.95 USDs 1.05 USDs
USDT/USDs 0.95 USDs 1.05 USDs
wETH/USDs 2500 USDs 4500 USDs
ARB/USDs 0.6 USDs 1.3 USDs
wBTC/USDs 42000 USDs 78000 USDs
SPA/USDs 0.003 USDs 0.020 USDs

The users will earn fees APR in Grail and xGrail which is on top of the rewards APR.

For the SPA/USDs farm, as proposed in the LTIPP proposal, sperax treasury will provide 75% APR in SPA and xSPA. The current incentives of the SPA/USDs farms on Demter 1.0 is about 65% in SPA tokens. The primary objective for high rewards for SPA/USDs farms is to build deep concentrated liquidity for the sperax ecosystem tokens. The LPs must be rewarded well for trusting and investing in the SPA/USDs farm for the ecosystem’s growth.

4

@Sperax what do you mean by the fact that all new Demeter 2.0 farms will be on Camelot and there’s no need to set price ranges. Do you mean to say that all new Demeter 2.0 farms will be on Camelot v 2.0 and price ranges are not required.

5

The seven new farms will be on Camelot V3. LP tokens price range will be of the pool price range we set up on camelot. Price range is not required on demeter.