FIP-12: TRIBE Incentives to Saddle D4

Forum Discussion

https://tribe.fei.money/t/saddle-d4-tribe-rewards/3351

Abstract

Allocate 5M TRIBE from the DAO Treasury to liquidity mining incentives on the Saddle d4 pool (LUSD, alUSD, FRAX, FEI) for constant distribution over 1 year. Saddle is a stablecoin optimized AMM similar to Curve. The goal of this pool is to provide liquidity to top decentralized stablecoins to help reduce ecosystem dependence on USDC/USDT. Any TRIBE allocated would be paid back to the treasury if we upgrade the staking rewards per the existing discussion here: https://tribe.fei.money/t/masterchief-staking-rewards-upgrade/3350

Motivation

There is a kicked off discussion around adjusting the current staking rewards distribution by leveraging a new rewards contract similar to SushiSwap’s MasterChef. This will take time to implement and audit. In the meantime we have an opportunity to collaborate with some of the best decentralized stablecoins (FRAX, LUSD, alUSD) in a Saddle d4 (decentralized four) pool. Saddle is a StableSwap AMM which has low slippage for pegged assets.

Proposal

This proposal would allocate 5M TRIBE from the DAO treasury for rewards to liquidity providers of the d4 pool. These TRIBE will be paid back to the treasury from the existing staking rewards if and when the upgrade to the new staking system takes place.

The specific staking rewards contract to be used is under development by Frax Finance, and will allow stakers to earn all 4 governance tokens simultaneously.

For example, an amount of 5,000,000 TRIBE (~3m USD) would translate to a 6% APY on 50m TVL. If all 4 tokens allocate a similar amount of rewards, then the APY would jump to 24% for this amount of TVL. This represents ~3.3% of the current staking rewards distribution.

Benefits to the Tribe:

• Additional liquidity for FEI
• Peg support through StableSwap AMM
• Alignment with top decentralized stablecoins
• Reducing industry dependence on USDC by providing liquidity between viable alternate stables

Specification

The exact steps executed by this proposal would be the following :

• Move 5,000,000 TRIBE from the DAO Treasury to the joint StakingRewards contract

Voting Rules

Voting will last 2 days. This is a non-binding signal vote. Please keep in mind that snapshot votes can be changed but not withdrawn until the end of the voting period.

The two options to vote on are:

5M TRIBE @ Saddle D4 No TRIBE to Sadddle D4

This is a single choice vote, if option 1 wins the majority, we will submit a DAO proposal after the end of the snapshot vote.