Author(s): Sperax Team
Reference: Arbitrum AMA Jan 30, 2023
Created: Jan 31, 2023
Labels: [#Governance, #LiquidityMining]
Simple Summary
As the Demeter genesis campaign comes to an end, the SPA Gauge will take over the responsibility of distributing SPA to liquidity pools. How much SPA emitted to each pool is determined by a monthly gauge vote by veSPA holders. Protocols can bribe veSPA holders for votes. This proposal suggests the Sperax treasury fund the first 90 days of gauge activity. A 360 day campaign at this emission rate would inflate the circulating supply of SPA 9.66%.
Abstract
The current circulating supply of SPA is 1.593 billion tokens, which is 34.5% of the current total supply (total supply reduces with SPA burn). SPA from the SPA gauge are distributed with every block, ready to be claimed by the LPs of pools that include USDs and SPA. The monthly SPA budget will start at 12.825M SPA.
SPA inflation from the SPA gauge is distributed to liquidity pools according to the results of the monthly gauge vote. The number of SPA distributed depends on the SPA budget. This SIP proposes a budget which matches the current emissions rate. This budget will be up for consideration every 90 days. During the first year, the total inflow will be 153.9 Million SPA if the budget isn't reduced. One year of this budget would inflate the SPA supply by 9.66%.
Motivation
A significant portion of SPA is held within the SperaxDAO treasury and must be distributed to mature the ecosystem.
This can be done with four primary focuses
- Decentralize SPA governance
- Incentivize the minting and depositing of USDs into liquidity positions
- Incentivize DEXs to promote USDs trading pairs
- On-chain liquidity of SPA and USDs
Overview
The SPA gauge needs a starting budget for veSPA holders to allocate with votes and bribes. When considering budgets to begin the campaign, we will use current emissions and reduce aggressively with time.
The soon to be concluded Demeter Genesis campaign matched partner rewards according to $ value.
When the rewards for the last refill were calculated (Jan 19,2023), the price of SPA was $0.0039, nearly an all time low. This resulted in the SperaxDAO emitting the most SPA per day compared to any other time in protocol history.
Let’s look at a breakdown of the current weekly SPA emissions to Demeter pools. This is the proposed starting emissions rate for the SPA Gauge. The idea is to start with the highest emissions, reducing every 90 day epoch.
Currently, 427,500 SPA / day are distributed to the pools being added to the gauge:
GMX/USDs 161k/day
PLS/USDs 31k/day
ETH/USDs 55k/day
SPA/USDs 78.5k/day
USDC/USDs 20k/day
SDL/USDs 16k/day
L2DAO/USDs 38k/day
fxUSD/USDs 15k/day
gDAI/USDs 13k/day
Reducing Inflation In 2023
To attract early usage of the gauge and to make bribes lucrative, the starting budget will start high and after every 90 days, an SIP will be posted to consider decrease.
Ensuring SPA and USDs Liquidity
SPA bribes will be provided by the SperaxDAO to encourage veSPA holders vote for SPA/USDs and USDC/USDs. A SIP is in active discussion to redirect SPA emissions from veSPA holders to the gauge where veSPA holders can earn the SPA by voting to direct SPA emissions to the major Sperax pools.
Technical Specification
Approve the first 90 days of the SPA gauge budget.
Day 1-90 budget
37,305,000 SPA
If additional USDs or Demeter farms are added to Demeter before the launch of the gauge, the emissions from the new pool will be added to the starting budget. RageTrade and VELA for example have been approved for Demeter Genesis but have yet to launch their farm. They will be automatically added to the SPA gauge.
Voting
Yes:
Approve proposed budget
No:
Deny proposed budget
