SIP-17: Launch GMX-USDs, PLS-USDs, SDL-USDs, L2DAO-USDs, Approve Demeter Genesis Structure
Author(s): Sperax Team
Reference: n/a
Created: Oct 26, 2022
Labels: [ex: #Governance, #LiquidityMining]
Simple Summary
Fund the Demeter Launch Partners and a 90-Day Genesis Campaign.
The Sperax Demeter Protocol front end will launch in November. To prepare for launch, the Sperax team built a group of Launch partners, consisting of top Arbitrum projects. The Demeter Launch partners are GMX, PlutusDAO, Saddle and Layer2DAO. This SIP proposes a SPA allocation to match the Launch partners’ reward contributions 1:1, according to dollar value during Demeter Genesis. Genesis is a proposed 90 day campaign which let’s DAOs apply for 1:1 matching SPA rewards (via SIP).
Launch Partner Farms
GMX - USDs emitting GMX, SPA
PLS - USDs emitting PLS, SPA
SDL - USDs emitting SDL, SPA
L2DAO - USDs emitting L2DAO, SPA
Abstract
DAOs that launch farms with Demeter during Genesis can submit an SIP requesting a matched SPA allocation. The Demeter Genesis cohort consists of GMX, PlutusDAO, SaddleDAO and Layer2DAO. These protocols will launch farms day 1 with USDs to receive the full 90 days of matched rewards at their desired contribution amount. The emissions rate will be rebalanced according to dollar value to match the DAOs contributions every 14 days. New DAOs that apply for Genesis matching can receive up to $10,000 worth of SPA / month.
Motivation
DAOs require incentivization to pair their token against USDs, opposed to ETH or other stablecoins.
This campaign will provide SPA as incentive to do so, but only if the DAO brings their own incentives. By limiting matching rewards to 90 days following Demeter launch, DAOs are incentivized to launch early, capturing more emission subsidies.
The Sperax team and community will closely monitor SPA sell pressure from emissions. This will better inform the economic design of the SPA gauge and the various pain points to solve with future Demeter versions.
Overview
This promotional Genesis campaign will assess Demeter’s ability to attract USDs and SPA into liquidity pools. This campaign is designed to increase USDs TVL and liquidity. If many projects pair their token against USDs, this will position USDs as the most liquid stablecoin in Arbitrum. This could make USDs the de facto Arbitrum trading pair, even with reduced incentives.
As TVL increases, the protocol revenue shall also increase, driving more revenue to the protocol, paying more in staking rewards and burning more SPA each week.
Demeter Launch Partner Funding
GMX contributing $20,000 GMX / Month = ~1,333,333 SPA Month 1
Saddle contributing 333,3333 SDL / Month = ~333,333 SPA Month 1
PlutusDAO contributing 14,000 PLS / Month = ~345,333 SPA Month 1
Layer2DAO contributing 400k L2DAO / Month = ~233,333 SPA Month 1
Limit Genesis to 90 Days after Launch
By cutting matching rewards after 90 days of launch, users are incentivized to participate early to capture more emission subsidies for longer.
For example: A DAO that launches a farm 45 days after Genesis launch can write a governance proposal to receive at max 45 days of matched rewards.
Receiving Genesis Matching Rewards
Any DAO can submit an SIP on forum.sperax.io to request SPA emissions on their pool. If the SIP passes the Sperax DAO process that farm would then receive matching SPA incentives up to $10,000 / month. Once the pool is live and the DAO’s incentives are deposited, the SPA will be matched.
Using a SIP system provides flexibility to the Sperax community to add or remove Genesis farms from receiving the matching Genesis rewards. For instance, a farm not attracting meaningful USDs TVL could be removed or receive decreased SPA rewards.
Preparing For Sperax Gauge
By the time the Genesis campaign concludes, the Sperax team will have published the Sperax Gauge parameters for community approval. This system will replace the Genesis reward mechanism. The Sperax gauge has two important components under research:
- Guaranteed Rewards
- Permissionless rewards given to any Demeter pair based on USDs or SPA TVL in the pool
- Voted Rewards
- A traditional gauge system where there is a fixed budget allocated by SPA stakers’ vote
Who Should participate in Genesis
- A DAO that is seeking an emissions subsidy
- A DAO that needs support attracting DEX liquidity
- A DAO unfamiliar with coding farms with Uniswap v3 NFT positions
- A DAO seeking additional demand for their token
- A DAO new to Arbitrum
Technical Specification
- Genesis campaign to run 90 days from Demeter launch
- Addition and removal of Genesis farms happen via SIP
- 1:1 match $ terms, rebalanced every 14 days
- Match up to $10,000 SPA / month
- Funded via bootstrap liquidity budget
- Token prices that fall below range will have SPA emissions shut off
- Add/remove matching rewards according to SIP
- Sperax team rebalance SPA portion bi-weekly
