SLURP-18 | Metis LST Provider Deployment, Metis Fee Structure Formalization & Liquidity Mining Incentives Authorization

Governance Proposal: Formalization of Fee Structure for stake.link's Metis Initiative

Abstract

This proposal seeks to formalize the fee structure as well as LP incentives in the form of SDL emissions from Treasury to incentivize the stMETIS/METIS Liquidity Pool for the stake.link protocol in preparation of a potential deployment to the Metis L2 network to provide decentralized sequencer services through Liquid Staking Tokens (LSTs). The proposed fee structure will support core contributors, sequencer operations, and an SDL fee.

Background

The Metis initiative aims to decentralize its sequencer operations, enhancing security, reducing censorship risks, and ensuring robust transaction processing.

As part of this initiative, Metis is onboarding Liquid Staking Providers (LSPs) to pair their LSTs with approved Metis Validators.

As of the morning of June 20, 2024, stake.link confirms that it has reached quorum to be eligible as an LST Provider to be selected by an official Metis Validator that has been approved by Metis Governance, reaching >5,000 METIS tokens voting “For” stake.link to become eligible for selection.

Rationale

In support of Metis' decentralized sequencer upgrade, stake.link proposes a structured fee system to incentivize and sustain all parties involved in the protocol. This fee structure ensures continued development, operational stability, and shared alignment for SDL token holders.

Proposed Fee Structure

-Core Contributor Fee (3%) -Purpose: To fund ongoing development, maintenance, and improvements by core contributors. -Allocation: A fixed 3% fee on rewards will be allocated to core contributors, ensuring that key Core Contributors are incentivized to maintain and enhance the protocol.

Sequencer Fee (6%)

-Purpose: To support the operational costs and incentivize node operators participating as Metis sequencers. -Allocation: A 6% fee on rewards will be allocated to sequencer nodes, ensuring reliable and secure transaction processing on the Metis network.

SDL Fee (6%) -Purpose: To reward SDL stakers for their participation within the ecosystem. -Allocation: A 6% fee on rewards will be directed towards SDL token stakers, promoting long-term participation and staking within the stake.link ecosystem.

Liquidity Mining | LP Incentives

In order to properly incentivize the stMETIS / METIS Liquidity Pool on The Hercules DEX in the Metis Ecosystem, we request governance approval for the emission of 1,956.95 SDL per day – the current daily emission rate for the wstLINK / LINK Liquidity Pool on Camelot DEX on Arbitrum.

Implementation

The implementation of this fee structure will be straightforward, leveraging existing smart contract mechanisms to automatically allocate fees as described.

This ensures transparency and efficiency in fee distribution.

Once accepted to be an LST Provider by a Governance-approved Validator, upon the listing of the stMETIS / METIS Liquidity Pool by a DEX in the Metis Ecosystem, approved daily emissions of 1,956.95 SDL will begin immediately.

Conclusion

The proposed fee structure formalizes aligned incentives that are necessary to sustain and grow the stake.link protocol as it integrates with Metis' decentralized sequencer initiative. By aligning incentives across core contributors, sequencer nodes, and SDL stakers, we aim to enhance the security, reliability, and overall success of both the stake.link and Metis ecosystems.

We urge the stake.link community to approve this proposal, formalizing a sustainable and robust fee structure for our collaborative efforts.

Thank you for your continued support and commitment to advancing the stake.link protocol.