[Ideation] SCP-177 ThorFOX/RFOX Minor Update: Accepting FOX/ETH Uniswap V2 LP Tokens for Staking

Summary: This proposal seeks to update the current ThorFOX/RFOX tokenomics to allow staking not only with FOX tokens on Arbitrum but also with FOX/ETH Uniswap V2 LP tokens on Arbitrum. This change aims to enhance liquidity provisioning, strengthening the FOX ecosystem.

Abstract: This proposal is a minor update to SCP-166 ThorFOX, which established a mechanism by which DAO tokenholders can stake their FOX tokens and receive a share of the RUNE affiliate fees. This proposal aims to update the ThorFOX/RFOX tokenomics to allow staking with FOX/ETH Uniswap V2 LP tokens on ARB, thereby strengthening the DAO’s alignment with the THORChain ecosystem. This initial vote will set the parameter to 0% of total RUNE fee distribution but allow for the inclusion of a token outside of the FOX token on Arbitrum.

Motivation: The primary motivation for this proposal is to ensure that the ThorFOX/RFOX program is beneficial to the DAO while providing more options for the stakers and DAO token holders. By enabling staking with FOX/ETH Uniswap V2 LP tokens, we can enhance liquidity provisioning on both mainnet and Arbitrum, thereby supporting both ecosystems.

Specification: This minor update to SCP-166 only alters the portion of the proposal which details the tokens allowed for staking that are then eligible to receive a portion of the monthly RUNE affiliate fees distributed to stakers. This would allow pro rata bucketing before any split of the revenues. If passed, 0% of the monthly affiliate fees would be distributed to the LP bucket, with 100% of (the 25% of total thorchain fees) fees/rewards distributed to FOX single staking bucket.

If passed, this proposal would implement the same 28-day unstaking period.

If passed, this proposal would implement the default that characteristics should be identical when possible for the LP token treasury remission/staking/burning protocols.

If passed, this proposal would implement the following changes:

Staking with FOX/ETH Uniswap V2 LP Tokens: In addition to FOX tokens on ARB, rfox/ThorFOX as a program would technically be accept FOX/ETH Uniswap V2 LP tokens. Implied Lower Rewards for FOX Single-Sided Staking: Instead of 100% of the 25% affiliate fees being distributed to FOX token stakers on Arbitrum, FOX<>WETH LP token stakers would also be eligible for the pro-rata monthly distribution (to be determined later).

Benefits:

Multichain Yield: Incentivize liquidity with RUNE, a different chain’s native token. Evergreen Contract: Once proven on Arbitrum, this model may replace the FOX Farm Rewards contract on mainnet. Enhanced Liquidity: Accepting FOX/ETH Uniswap V2 LP tokens for staking will improve liquidity. Stronger Alignment with THORChain: This update reinforces the DAO’s commitment to the THORChain ecosystem. Increased Flexibility for Stakers: More options for earning yield.

Drawbacks:

Engineering Work: This update will require effort from the engineering and product teams to implement and maintain. Complexity in Yield Distribution: Determining how to distribute affiliate fees among different types of staked tokens may add complexity. Less Rewards for Single-Sided Staking of FOX: Currently, 100% of the total rewards are distributed to single-sided stakers of FOX tokens. This would decrease that percentage.

Vote:

For: Enact the proposed changes to accept FOX/ETH Uniswap V2 LP tokens for staking as a separate genesis bucket. For with Changes: Support the proposal with modifications to be discussed in the forum or elsewhere. Against: No changes will be made to the current tokenomics.