Stopgap Staking Reward Schedule
Author: Dr Laurence E. Day
Snapshot Vote
As you’re all aware, the current staking reward incentives end for the following pools on March 8th:
- DEFI5
- DEFI5-ETH Uniswap LP
- CC10
- CC10-ETH Uniswap LP
Insofar as getting NDX distributed for the purposes of diluting power from the founders goes, this was a success. However, now that this is done, we’re faced with a dilemma:
a) We don’t want to completely cut short incentivisation for liquidity providers - it’s an effective way of buffering against impermanent loss, but…
b) Handing out 25% of our maximum supply every three months is, in every sense of the word, unsustainable.
We’re also in the unfortunate situation whereby the ORCL5 pool has zero incentivisation beyond it’s USP of being the only aggregate instrument for exposure to that particular market sector, which - if we take TVL as the metric of choice - is not enough.
Members of the Sigma committee and the core team are currently working on a proposal for a longer term, dynamic reward emission schedule parameterised over TVL on a per-index basis, which we intend to `solve’ this problem over a period of years rather than months. The first sighting of this idea in the wild is here, but - to be perfectly frank - this won’t be ready for consideration, much less proposal, discussion and DAO assent, before the current reward schedule expires.
To this end, I’m making the following proposal, in the hopes that we can fast-track it into action if it’s agreeable.
Action Points
-
Allocate 100,000 NDX from the DAO treasury for a one-month continued emission schedule, split as follows:
- [50,000 NDX] DEFI5-ETH Uniswap LP
- [40,000 NDX] CC10-ETH Uniswap LP
- [10,000 NDX] ORCL5-ETH Uniswap LP
-
Begin emission of these new reward pools either on or as close to March 8th as possible to minimise the amount of time that we’re `off-road’.
-
End-of-life the `pure’ DEFI5 and CC10 pools upon expiry. Their purpose (fast dissemination of NDX) has been served.
-
Deduct this 100,000 NDX from whatever amount we determine the longer-term final allocation to be (i.e. if we allocate 2.5 million NDX over a two year period, we’d initialise with 2.4 million instead).
- As a case in point, if those were the numbers we ended up using, we’d be handing out ~104,000 NDX per month anyway, so this is a stopgap in the truest sense of the word.
I anticipate that this will require an unstake/restake of LPs currently within the DEFI5-ETH and CC10-ETH pools, as they’d need to migrate to new contracts. Admittedly, I haven’t checked the extensibility of the existing pools in terms of topping up rewards or retargeting dates: I’ll need to check this point with @d1ll0n and edit this post accordingly.
I’ve created a Snapshot for this proposal (see the header of this post), with a relatively short timeframe [24 hours]. Given time sensitivity, if we hit Snapshot quorum in short order, I would move to get this proposal on-chain as quickly as possible.
Let’s hustle, people.