Smart Yield Junior Tranches on Sushiswap Onsen

The Sushiswap Onsen program provides smaller market cap token pairs additional liquidity incentives by setting aside $SUSHI awards over the course of 90-day periods. For a project to be eligible it must have a market capitalization under $100M, among other criteria. While Barnbridge’s $BOND will likely pass this threshold by the time the next 90-day cycle begins, the precedent has been set for applications’ tokens (e.g., Alpha Finance’s ibETHv2, Index Coop’s DPI) to be eligible candidates. This suggests that we could incentivize market making for ERC-20 junior tranche tokens with the launch of Smart Yield in the coming month.

This proposal suggests the following:

• The Barnbridge DAO will submit applications to the Onsen program for both Compound and Aave Smart Yield USDC Junior Tranches. This would require providing an initial $1000 worth of liquidity for the pairings, as well as 1000 $SUSHI or 2 ETH as a fee. Both of the junior tranche tokens would need to have CoinGecko profiles and have existed for longer than two weeks.

• Both junior tranche tokens would be paired against USDC.

• The Barnbridge DAO would further incentivize these pools by offering 1000 $BOND weekly in liquidity mining rewards for each.

• This could be complemented by additional liquidity mining rewards for the BOND/USDC Sushiswap pairing, which is nonexistent at time of writing.

The purpose of this proposal is three-fold:

• Greater liquidity for junior tranche tokens ultimately leads to greater senior tranche token volume

• Brings the Barnbridge ecosystem to a previously neglected, top-tier platform with over $3B in liquidity and which regularly records over $500M in daily volume

• Sushiswap is a proven competitor; strengthening ties with the platform should prove beneficial to Barnbridge, especially as we look into both building out the Bond Desk concept in the future as well as grow further ties with the yEarn ecosystem

The two options for this proposal are simple: either “Agree” or “Disagree.” Should the proposal get a meaningful quorum of “Agree”’s, the community can then move forward with hammering out precise liquidity mining allocations and collaborating with the Sushiswap team.