SIP-5 | Deploy SDT Spiral Locker - a liquid locker for StakeDAO Protocol

Summary: This proposal aims to start a discussion on the deployment of the second Spiral Locker — a liquid locker for our partner StakeDAO governance token — SDT.

Context: Spiral Locker presents the first liquid locker solution for SDT token holders. By offering a transferable and tradable wrapped version of SDT — sprSDT, users will be able to maintain liquid while benefiting from capital efficiency. The platform enables sprSDT staking for boosting power and additional incentives, delegation to various addresses, or participating as liquidity providers in the sprSDT/SDT pool on Curve for CRV emissions.

Boost Delegation The sprSDT holders in staking can manage their boosting power themselves by delegating boosts to their own address, or they can delegate their boosts to any other address. Additionally, sprSDT holders can delegate their boosts to Concentrator to receive Concentrator rewards in SPR every two weeks. Moreover, Paladin's SDT boost market will soon be integrated with Spiral's website, enabling sprSDT holders to participate in Paladin boost marketplace and lend their SDT boosts to renters on Paladin, earning native rewards.

SDT delegation in Stake DAO works in such a way that boosts linearly lose their power over time. To maintain optimal boosting power, users have the option to redelegate their boosts periodically. By redelegating, they can ensure that their boosts retain their effectiveness over time.

However, redelegating is only necessary if the boosts have been updated on the receiver. If they haven’t – the receiver will still hold an effective balance from the date of the last update.

Initial Liquidity and Distribution: Currently, the Spiral Treasury holds 400k locked SDT and 300k SDT (~$300k worth). The first preminted sprSDT to kick-start liquidity and incentivize initial lockers will be backed by Treasury assets. We will seek a gauge for this locker on Curve and possibly FraxSwap.

Minting fee: as always – 0%. Staking: for the first few months, Spiral DAO won’t take any fees. Later on, the fee will increase to 10%.

Means:

• Human resources:
  • The Multisig team will need to perform several transactions.
  • Dev contributors will have to polish the smart contract base for liquid lockers.
• Treasury resources: the Treasury will cover any costs for initial incentives if they arise.

Technical implementation:

• The Treasury Multisig will have to perform several txs:
  • Seed the sprSDT/SDT pool on Curve
  • Regularly perform actions regarding SDT token management, such as claiming and voting.
• Building products on top of StakeDAO requires a new code base, which will have to be audited, as well as some changes on the Spiral front.

Voting options:

• Yes, let’s deploy SDT Spiral Locker
• No, do not deploy SDT Spiral Locker
• Abstain