SIP-20: Launch ETH - USDs Demeter Pool

SIP-20: Launch ETH - USDs Demeter Genesis Pool

Author(s): Sperax Core Team

Reference: N/A

Created: 11/16/22

Labels: #LiquidityMining

Simple Summary

This SIP proposes launching an ETH-USDs farm on Uniswap v3, launched via Demeter. SperaxUSD to provide SPA incentives at 55,555 SPA/day. Rewards will be reassessed after four weeks, emissions may be adjusted depending on SPA token price and TVL attracted into the pool and demand for the pool.

Abstract

In order to improve the overall experience for Demeter users and traders, an ETH - USDs pool is required. Incentivizing this pool with SPA will allow for sufficient liquidity to allow for improved routing from ETH to Demeter pairs seamlessly.

Motivation

ETH is money. To allow the Ethereum community to spend their money and buy major assets deployed with Demeter, we need an ETH - USDs pair. This allows a user to trade from ETH to other protocol tokens seeded against USDs but it’s routed through the ETH - USDs pool and the other Demeter pool seeded against USDs, if this is the cheapest option. This allows for maximum effectiveness for Demeter liquidity providers to earn fees from users swapping in and out of the tokens.

Overview

Using the bootstrapping liquidity budget, 55,555 SPA/day should create a pool with well over 500k TVL according to the current trading price of SPA at 0.006. Thanks to the tokenomics of SperaxUSD, this increase in TVL directly drives value to SPA. So this TVL could increase the pools TVL in the future.

This is a self reinforcing phenomenon because as the Demeter experience becomes better, USDs non-rebasing TVL grows, which increases cash flow to SPA, increasing SPA price, which increases the pools TVL, repeating the process. SPA goes up in price, pool rewards increase, and liquidity for USDs increases in parallel. Positive flywheel in action.

Technical Specification

Incentive Size: 55,555 SPA/day

Funding: Bootstrapping liquidity budget.

End of campaign: Continue at 55,555 SPA/day until a new SIP specifies otherwise or Sperax Gauge is launched.