IIP-12 DPI Liquidity Mining #3

Simple Summary

Extend INDEX liquidity mining incentives for the DeFi Pulse Index (DPI) Set for 30 days with a lower (35% reduction) issuance rate.

Abstract

Create a new INDEX liquidity mining program for the DeFi Pulse Index Set with the following parameters:

• Programme runs for 30 days (from ~12PM PDT, January 6th 2021 to ~12PM PDT, 5th February 2021).
• Programme will use the same staking contract as IIP-11 to remove the need to unstake and restake.
• Programme will have reduced issuance rate (2,500 vs 3,864) compared to IIP-1 (a 35% reduction)
• 75,000 INDEX represents 0.75% of total issuance and about 1.5$ of the unallocated issuance.

Motivation

The DeFi Pulse Index currently has high liquidity on the Uniswap ETH - DPI pool. This is in part due to the liquidity mining incentive program. High Uniswap liquidity allows users and third party integrators to confidently enter and exit DPI positions.

The current liquidity mining incentive program ends on January 7th. This proposal seeks to extend liquidity mining incentives with a new liquidity mining program to continue growing distribution and adoption of the DPI.

The change from 15,000 INDEX to 3,864 per day was accompanied by a significant drop in liquidity in UNSIWAP in early December:

However, there are more secondary liquidity options opening on the market and competing incentives available:

Work is ongoing to activate intrinsic productivity contracts to capture more income from DPI (which may be used to incentivise the liquidity pool). This will not be available until February

In addition work is ongoing to allow easier access to exchange issue and redemption for large purchasers. Again, this is unlikely to be available until February.

FOR

• Extend liquidity mining incentives for the DPI set according to the parameters above.

AGAINST

• Do not extend liquidity mining incentives for the DPI set according to the parameters above.

Specification

Overview

The deployed smart contract being used for the current liquidity mining program can be extended, but only for the same timer period.

The proposed smart contract for distributing liquidity mining rewards functions exactly the same way as the current liquidity mining smart contract:

Existing stakers need to take no action.

New stakers would need to:

1. Users deposit ETH and DPI into the Uniswap ETH - DPI pool and receive Uniswap ETH DPI LP tokens.
2. Users deposit their Uniswap ETH DPI LP tokens into the proposed Index Coop liquidity mining contract.
3. Users receive INDEX tokens in proportion to the quantity of ETH DPI LP tokens deposited.