dhive

SIP-58: Close the Gauge

avatar
Sperax by 0xf005329d4E8CD0D4f908542289Fca04960AB49FF on
November 27, 2023, 7:07 PM

Author: Sperax Core Team Created: November 24, 2023 Labels: #SPA-Gauge, #veSPA-emissions, #Demeter

Summary

In 2023, SperaxDAO launched SPA Gauge to increase USDs liquidity and facilitate deeper concentrated liquidity of new tokens with USDs. The ecosystem experienced some growth during the early days. Lately, liquidity has moved out of the ecosystem, and the SPA gauge has been unsuccessful in retaining any liquidity either for USDs or Demeter.

Motivation

  • Since the launch of SPA Gauge, Sperax treasury has emitted over half a million dollars to Demeter farms. The Demeter and USDs TVL has halved in the last five months.
  • The target is to increase USDs adoption, which will help grow the Sperax ecosystem and benefit its participants. We must rethink our reward mechanism to direct emissions.

Overview

Apart from maintaining the target to make SPA deflationary, SperaxDAO should ensure that the emissions have a direct effect on increasing the ecosystem TVL. It should also be recognized that with increased TVL, the reward rate should also increase to facilitate larger deeper liquidity. Upon reviewing the performance of the SPA Gauge, the sperax team has decided to propose the closure of the SPA Gauge.

The xSPA, currently being emitted as bribes, will be directed as emissions for veSPA holders (As has been the case before the launch of SPA Gauge). Earlier, we executed a reduction in bribes by 20% through SIP-56. The current bribe amount is 306840 xSPA tokens. We propose to increase the emissions amount by 25% to 383550 xSPA tokens.

Following the principle of proportionating emissions with USDs and SPA holdings, the APR for any farm should directly depend on the SPA or USDs holdings in the farms. Also, the APR should change(increase) as the SPA+USD holdings increase. We propose to implement the following methodology to identify the APR for any farm.

Range start (in $) Range ends (in $) Range APR
0 5000 0.00%
5001 20000 7.50%
20001 100000 15%
100001 250000 20%
250001 500000 25%
500001 1000000 30%
1000001 2000000 35%
Above 2000000 40%

For example, any farm having a liquidity of $330,000/- in (USDs+SPA) will have the following APR

*APR = [{(330000-250000)*25 + (250000-100000)*20 + (100000-20000)*15 + (20000-5000)*7.5 +(5000-0)0}/330000] = 19.12%

And if any farm has a liquidity of $860000/- in (USDs+SPA) will have the following APR

*APR = [{(830000-500000)*30 + (500000-250000)*25 + (250000-100000)*20 + (100000-20000)*15 + (20000-5000)*7.5 +(5000-0)0}/830000] = 24.53%

For any SPA/USDs farm the APR will be 5 times the APR calculated through the methodology. As per the new methodology, the expected APR for the farms eligible for emissions is mentioned below.

Farm TVL New APR
USDC/USDs Uniswap v3 $298,108.09 15.39%
USDs/USDC.e Uniswap v3 $269,631.67 14.90%
PLS/USDs Uniswap v3 $140,070.88 12.32%
USDs/USDC.e Camelot $277,804.29 15.05%
plsSPA/SPA Uniswap v3 $268,357.61 14.88%
SPA/USDs Camelot $102,895.92 68.12%
SPA/USDs Uniswap v3 $93,722.42 66.10%
fxUSD/USDs Uniswap v3 $45,482.55 12.60%
WETH/USDs Uniswap v3 $17,335.52 7.50%
ARB/USDs Uniswap v3 $5,977.52 7.50%

The emission will be decided every week on Wednesday based on the average daily holding of the past seven days.

Technical Specifications

  • SPA Gauge will be closed
  • xSPA bribes will directed to veSPA emissions with an increment of 25%.
  • Demeter farm emissions will be calculated based on the new methodology

Voting

For

Close SPA gauge, redirect emissions to veSPA, and implement new emissions methodology

Against

Do not close the SPA Gauge

Warning

Exercise caution when exploring DAO proposals. Proposals can be submitted by any member of the community so there's an inherent risk of encountering scams or deceptive links. Always critically assess the validity of each proposal and its links before taking action.
start
November 27, 2023
7:07 PM
end
November 30, 2023
7:07 PM

Voting type
single-choice
Votes
230,988,337

Final Votes
closed

For
231M veSPA
99.99%
Against
17.3K veSPA
0.01%