SIP-63: Demeter 2.0 Launch

Author(s): Sperax Core Team Reference: Demeter 2.0, LTIPP, Incentives Created: June 20th, 2024

Summary

Demeter protocol is a new protocol for DAOs to launch and manage decentralized exchange liquidity without knowing how to code.

Demeter 2.0 is an upgraded version of Demeter version 1. Demeter 2.0 will give the power to farm creators to launch incentivized farms on Camelot V3 and Uniswap V3. This proposal aims to allocate rewards for seven new farms being set up with the launch of Demeter 2.0

Motivation

• Incentivise farms based on the TVL contained in one or more assets in the farm.
• Configurable reward rate for all farms which Farm owners can manage
• Better user experience and improved interaction with the interface

Overview

Protocols seeking to incentivize liquidity on Demeter often faced a challenge - a lack of direct correlation between increased incentives and increased liquidity. We're introducing a new "Steady APR Farm" on Demeter 2.0 to address this. While the APR isn't fixed, it will be more predictable than the current model. Reward token managers can set and adjust the APR based on the farm's Total Value Locked (TVL), providing more consistent rewards for liquidity providers.

We've been selected for Arbitrum Foundation's Long-Term Incentive Pilot Program (LTIPP). The Sperax DAO will receive 250,500 ARB tokens to distribute across seven new Demeter 2.0 farms by September 2nd.

Additionally, the Sperax DAO will match these ARB rewards with SPA and xSPA tokens, distributing a total of 32 million SPA within the LTIPP timeframe. Our goal is to reach a TVL of $20 million on Demeter and $10 million in USDs during the LTIPP.

The total TVL and emission targets are mentioned below in the table.

APR will initially be set to 25% in ARB and 25% SPA/xSPA for the following farms on Camelot V3

1. USDC/USDs
2. USDC.e/USDs
3. USDT/USDs
4. wETH/USDs
5. ARB/USDs
6. wBTC/USDs

APR will initially be set to 25% in ARB and 75% SPA/xSPA for the following farm on Camelot V3:

1. SPA/USDs

As the total Demeter 2.0 TVL and farm TVL increase, the APR will be adjusted to optimize the rewards to achieve the TVL target. A new proposal will be presented to finalize the reward APR post the LTIPP timeline.

The daily reward rate can be changed based on total Demeter TVL and individual farm TVL. We will set the maximum rewards release per day every week. Keeping the target TVL in mind, the maximum rewards per day are mentioned below.

Week	Max ARB rewards per day	Max SPA rewards per day	Max xSPA rewards per day
1	763	15263	61050
2	1068	21368	85470
3	1496	29915	119658
4	1885	40205	160821
5	2345	56287	225149
6	2955	75519	302075
7	3907	101129	404517
8	5148	141581	566324
9	6757	180194	720776
10	9460	252272	1009087

USDs will be used as the base token for xSPA/SPA incentives and the pairing token (USDC, USDT, wBTC, etc) will be used as the base token for ARB incentives.

For the Camelot v3 pools, the price ranges are mentioned below.

Farms	Min Price	Max Price
USDC/USDs	0.95 USDs	1.05 USDs
USDC.e/USDs	0.95 USDs	1.05 USDs
USDT/USDs	0.95 USDs	1.05 USDs
wETH/USDs	2500 USDs	4500 USDs
ARB/USDs	0.6 USDs	1.3 USDs
wBTC/USDs	42000 USDs	78000 USDs
SPA/USDs	0.003 USDs	0.020 USDs

The users will earn fees APR in Grail and xGrail which is on top of the rewards APR.

Technical Specifications

• Launch Demeter 2.0 and 7 new farms as stated in the overview
• Allocate 32 million SPA tokens to be distributed in the first 10 weeks of Demeter 2.0
• Allocate all LTIPP grants of 250500 ARB tokens in the first 10 weeks of Demeter 2.0
• Release the incentives in the proposed order as mentioned in the overview

Voting

For: Implement SIP-63 Against: Don't implement this proposal