SIP-X Retain SPA incentives directed to Saddle FraxBP-USDs farm, use it in SPA rewards budget during Saddle+Demeter integration

Governance proposals (discussed) Closed
1

Title: Retain SPA incentives directed to Saddle FraxBP-USDs farm, use it in SPA rewards budget on Saddle+Demeter integration
Author: Core team
Reference: SIP-26 Saddle FraxBP-USDs farm, L2D4, Rekt
Created: February, 22nd, 2023
Labels: #Governance-Discussion

Simple Summary / Abstract

The proposal is to refuse to migrate SPA incentives (55,555 SPA weekly) from the FraxBP-USDs farm for bribing L2D4 Farm as defined by SIP-26.

SPA incentives directed to the Saddle FraxBP-USDs farm will be retained in the overall SPA rewards budget to launch a Saddle+Demeter integration driving emissions toward a USDs farm on Saddle which will be added to SPA Gauge.

Motivation

One of the stablecoins in the L2D4 farm is USX by dForce. dForce has just suffered from a smart contract vulnerability that led to asset loss of ~$3.6M, thus the Core Team offers to re-consider retaining the SPA rewards budget and use it during the Saddle+Demeter integration and launch a USDs farm which will be added to the SPA gauge.

Overview

Sperax has a long-term partner relationship with Saddle Finance. Sperax and Saddle Communities cooperated on farms hosted on Saddle (FraxBP-USDs) and Demeter (SDL/USDs).

As per SIP-26, it was planned to migrate SPA Incentives from Saddle FRAXBP-USDs to bribe the new L2D4 pool on Saddle FRAX/alUSD/USX/USDs.

Unfortunately, dForce which stands behind USX stablecoin - one of L2D4 farm assets - has just suffered from a smart contract vulnerability that led to an asset loss of ~$3.6M combined on Arbitrum and Optimism, as reported by Rekt.

Thus, instead of migrating SPA incentives (55,555 SPA per week) to the L2D4 farm the Core team offers to use this SPA to increase the overall SPA reward budget to launch a Saddle+Demeter integration that will drive emissions toward a USDs farm on Saddle. This farm will be added to the SPA Gauge.

Technical Specification

  • Retain SPA incentives directed to Saddle FraxBP-USDs farm
  • Set reward rate for Saddle USDs/Frax BP farm to zero
  • Use retained tokens as a part of the overall SPA rewards budget
  • Launch a USDs base farm/pool on Saddle and add it to the Sperax gauge

Voting

For
Retain SPA incentives (55,555 SPA weekly) directed to Saddle FraxBP-USDs farm, use it in the SPA rewards budget on Saddle+Demeter integration

Against
Keep SPA incentives (55,555 SPA weekly) directed to Saddle FraxBP-USDs farm.

  • For
  • Against

0 voters

2

Looks like the L2D4 farm is live on Saddle, as per a prior SIP the Sperax protocol was supposed to bribe the FXS holders. In that case the proposal would be to not increase the reward distribution rate for the global rewarder. The bribes were fixed at a value of $5,000 worth of SPA tokens per week. @AlecShaw can comment on the mechanism further.

3

L2D4 ended up launching, let’s uphold our commitment to bribe $5k of SPA/week to L2D4.

As a community we will watch the performance of L2D4 and adjust bribes accordingly.

I suggest we close this discussion.