Proposal 30 – Joint Liquidity Incentivization: frxUSD/USP Curve Pool
Summary
This proposal introduces a strategic partnership between Frax Finance and PikuDAO to co-incentivize a new frxUSD/USP liquidity pool on Curve Finance.
To bootstrap institutional-grade liquidity and enable "Yield-Stacked" opportunities for LPs, Frax Finance proposes to contribute $100 in WFRAX per day to the pool's incentive layer. In return, we propose that the Piku community allocates 10% of the current USP Holding rewards (amounting to 6,844.63 PIKU per day) to match this effort.
Rationale
The pairing of frxUSD and USP creates a premier stablecoin primitive on Ethereum, bridging two distinct and highly productive yield sources:
- Yield Stacking: LPs benefit from the baseline TradFi T-bill revenue of frxUSD (~3.4%) stacked with the high-performance delta-neutral FX yield of USP (8%+).
- Deep Institutional Liquidity: By establishing a $1M target TVL, we provide a reliable venue for users to trade and mint USP against one of DeFi’s most trusted RWA-backed stables.
- Secondary Utility: Establishing this pool on Curve allows for the pursuit of onboarding LP tokens as collateral in vaults like the Stake DAO Vault on Morpho, enabling users to earn rewards on top of their LP yield: Stake DAO frxUSD v2 Vault
Incentive Distribution
The campaign will run for an initial period of 8 weeks (2 months). PIKU rewards will be redirected from the existing USP Holding campaign, calculated daily, and distributed via Merkl.xyz to ensure transparency and optimized capital efficiency.
| Campaign Type | Asset | Daily Rewards |
|---|---|---|
| Piku Incentive (10% of USP Holding) | PIKU | 6,844.63 PIKU |
(Note: Frax Finance’s matching WFRAX contributions will also be routed directly through the Merkl campaign over this 8-week period).
Pre Proposal
| Rate | Campaign Type | Distributed Everyday |
|---|---|---|
| 70% | USP Holding | 47,912.39 PIKU |
| 10% | Uniswap USP/USDC Pool LPs | 6,844.63 PIKU |
| 7.5% | Borrow USDC on USP/USDC Alpha USDC Forex V2 Morpho Market | 5,133.48 PIKU |
| 5% | Pendle LP USP | 3,422.32 PIKU |
| 5% | Pendle YT USP | 3,422.32 PIKU |
| 2.5% | Supply USDC to Alpha USDC Forex V2 Vault on Morpho | 1,711.16 PIKU |
Post Proposal
| Rate | Campaign Type | Distributed Everyday |
|---|---|---|
| 60% | USP Holding | 41,067.76 PIKU |
| 10% | Curve frxUSD/USP Pool LPs | 6,844.63 PIKU |
| 10% | Uniswap USP/USDC Pool LPs | 6,844.63 PIKU |
| 7.5% | Borrow USDC on USP/USDC Alpha USDC Forex V2 Morpho Market | 5,133.48 PIKU |
| 5% | Pendle LP USP | 3,422.32 PIKU |
| 5% | Pendle YT USP | 3,422.32 PIKU |
| 2.5% | Supply USDC to Alpha USDC Forex V2 Vault on Morpho | 1,711.16 PIKU |
Suggested Action
- Allocate 10% of the USP Holding incentive (6,844.63 PIKU daily) to the frxUSD/USP Curve pool LPs for the 8-week duration of the campaign.
- Enable the Frax Finance team to deposit the $100/day WFRAX co-incentive curve pool's CRV gauges.
- Integrate the resulting Curve LP position as a collateral asset in the StakeDAO frxUSD v2 vault on Morpho.
Off-Chain Vote
For
14.89M sPIKU100%
Against
0 sPIKU0%
Abstain
0 sPIKU0%
Timeline
Apr 22, 2026Proposal created
Apr 22, 2026Proposal vote started
Apr 24, 2026Proposal updated