SIP-7: USDs Curve Liquidity Experiment

Author(s): Sperax Core Team

Reference: Mentioned in recent AMAs

Created: Aug 22, 2022

Labels: #LiquidityMining

Simple Summary

This proposal is following up on the governance post in the Curve forum . This well received proposal confirmed interest from the Sperax and FRAX community for a USDs Metapool on FRAXBP Arbitrum. SperaxUSD to provide bribes at 88,888 SPA/day, each week for a 4 week liquidity experiment.

Abstract

In order to improve the user experience for USDs users and the greater Arbitrum ecosystem, $USDs liquidity must be on multiple DEXs. This pool will be a metapool on top of the FRAX base pool (FRAXBP) on Curve. If this pool doesn’t receive significant TVL or high economic activity, we can choose to discontinue the bribes at the end of the 4 week period.

Motivation

Curve is the foundation for stablecoin liquidity. Curve provides visibility to USDs and incentivizes liquidity through CRV, the DEX’s native token. This CRV allocation is purchased via the bribes to veCRV and clCVX holders. CRV incentivization would help deepen the liquidity of USDs and lay the groundwork for future collaborations with the FRAX protocol.

Such collaborations include:

-Demeter pools

-FPI as collateral in USDs

-USDs FXS treasury swaps

-Protocol owned liquidity programs

Overview

Using the bootstrapping liquidity budget, 88,888 SPA/day should create a pool with ~3M TVL according to the current trading price of SPA at 0.013. Thanks to the 100% backed USDs model, this increase in TVL directly drives value to SPA. In addition to the increase in TVL driving value to SPA, USDs becomes highly liquid on Curve, increasing user experience. This is a self reinforcing phenomenon because as the experience increases, TVL grows, which creates a better experience thanks to the TVL driving value to SPA. SPA goes up in price, pool rewards increase, and liquidity for USDs increases in parallel. Positive flywheel in action.

This SIP is suggesting a 4 week trial period where we test the weekly bribe of 88,888 SPA and resasses the bribing system at that point.

Technical Specification

Bribe Size: 88,888 SPA daily (622,216 SPA weekly).

Funding Source: Bootstrapping liquidity budget.

Funding Duration: 4 weeks of bribes

Bribing Protocol: Voitum - Votium is an incentives platform where vlCVX and veCRV holders can receive compensation (bribes) from buyers interested in amassing voting power(CRV emissions). More on Votium here.

start

August 25, 2022

11:27 AM

end

August 28, 2022

11:27 AM

Voting

off-chain

Voting type

single-choice

Voters

Votes

111,014,840

Final Votes

closed

Yes

111M veSPA

100%

0 veSPA

item label

Placeholder title of a dao proposal

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0x000000000000

Mon 00, 2024 00:00

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Voting

100,000

Voting type

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Voters

1,000,000

Votes

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Votes

Choice label

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TICKER

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Choice label

TICKER

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