Objective:

1. Become a launch partner with Resonate. a. Co-market utilizing Twitter, Medium, and any other social media platform. b. Display each other's logos on one another's websites. c. Include a link to the Resonate Dapp (or the relevant Resonate pool(s)) on the SpiritSwap Dapp.
2. Within two weeks of the passage of this proposal or one week prior to the Resonate public launch (whichever is later): a. Create a 12-month MIM-USDC LP pool on Resonate. b. Deploy up to $10,000 worth of idle SPIRIT in the treasury to that pool.
3. Lock-down ~$300k+ of mercenary liquidity for 12 months.
4. Diversify treasury with USDC and MIM at a 110.95% multiplier.
5. Offer upfront yield payouts on MIM-USDC LPs of 9.77% in SPIRIT.

Summary:

What are we proposing?

Historically, SPIRIT in the treasury cannot be swapped for other tokens, such as stablecoins, without having adverse effects on the token's price. Resonate offers a solution that would allow SpiritSwap to use treasury assets in a more productive manner. Using a Resonate pool, SpiritSwap can emit SPIRIT tokens in a lump sum to users in exchange for locking liquidity and redirecting native emissions to the treasury. Specifically, the initial Resonate pool will focus on the MIM-USDC Spiritswap LP vault on Beefy. Under this proposal, the Spiritswap treasury will deploy up to $10,000 worth SPIRIT to a Resonate pool, incentivizing users to deposit MIM-USDC SpiritSwap LP tokens into the pool. These tokens will be locked up for a 12-month term and deposited into Beefy’s MIM-USDC SLP Vault. The MIM-USDC SLP rewards will be sent back to Spiritswap’s treasury, enabling Spiritswap to diversify its treasury via a synthetic swap at a 110.95% multiplier. When a user deposits into this Resonate pool, they forfeit the future MIM-USDC SLP yields in return for an upfront payment in SPIRIT tokens.

What does this mean for Spiritswap?

SpiritSwap would earn a return of ~10.95% in MIM-SPIRIT SLPs on the $10K worth of SPIRIT deployed. SpiritSwap would be focusing on treasury diversification into stablecoins.

Through this program, SpiritSwap incentivizes locking roughly $307k into its MIM-USDC SLP farm for a period of up to 12 months. Learn more about Resonate here.

Overview

Resonate is a Yield Futures Protocol developed by Revest Finance and built on top of Revest’s Financial NFT (FNFT) technology.

Using Resonate, we’re able to separate the principle and interest components of a position by issuing two FNFTs—one containing the principle and the other containing the rights to future interest on that principle.

Resonate facilitates the commerce of the rights to future interest by matching issuers—who want to sell off their interest rights for a one-time upfront payment—and purchasers—who want to buy the rights to future interest for a one-time upfront payment.

Risks

For an issuer (typically ‘retail investors’ and ‘smart money’) the risks are minimal. Mainly, they’re sensitive to token price fluctuations.

A purchaser, on the other hand, is exposed to opportunity cost. This implicitly points to the optimal candidate to take on the role of the Purchaser: DAOs and Protocols!

Normally, SpiritSwap would be unable to deploy their native-token treasuries as their direct deployment to yield farms would dilute returns provided by SpiritSwap, and their direct sale would lead to adverse price action? This means as a purchaser, SpiritSwap will not experience any form of opportunity cost due to not being able to utilize these native tokens to begin with. Therefore, utilizing Resonate to perform a synthetic swap of SPIRIT for USDC-MIM SLPs is, as Spock would say, ‘logical.’

Purchasers hold their principal within the Principal-FNFT and, therefore, retain a fully liquid FNFT throughout the term, allowing them to sell it on OpenSea, LooksRare, or SudoSwap should the need arise.

Details

1. 9.77% of the principal is paid out in SPIRIT upfront to incentivize ‘retail investors’ and ‘smart money’ to enter Beefy’s USDC-MIM Spiritswap LP Vault, giving them instant yield paid in SPIRIT.
2. Their tokens are held within a Principal-FNFT for 12 months.
3. The FNFT remains fully liquid throughout the term, allowing its sale on OpenSea/LooksRare/SudoSwap should the need arise.
4. The LP tokens are staked into Beefy’s MIM-USDC SLP Vault.
5. The MIM-USDC SLP rewards generated by the vault are delegated to the Interest-FNFT held by the SpiritSwap treasury, and these rewards may be claimed at any time.

*Please note that the “per 100 tokens deposited” is a standardized value and the minimum amount of tokens required will not necessarily be this large.

Resonate is planned to launch late Q3 2022.

Implementation

• Incentivize liquidity on SpiritSwap
  • Utilize 1.5MM SPIRIT to incentivize deposits
    • The upfront payout rate may fluctuate if the vault APY on Beefy fluctuates
• Projected TVL Gain: $307k
• Spiritswap ROI: ~110.95% return, ~$3,285 profit

Business and Technical Requirements

If necessary, Resonate will develop an adapter for SpiritSwap that will allow SpiritSwap to claim the interest in SPIRIT tokens.

The upfront deployment to the Resonate pool will be $2500 worth of SPIRIT, with the remaining $7500 worth held in reserve by the SPIRIT team, with distribution of the remaining allocation delegated to them.

Glossary of Terms

FNFT - Financial Non-Fungible Token.

Yield Futures - the separation of a stake’s periodic interest payments from its principal repayment obligation to create a series of individual FNFT’s. With Yield Futures, the underlying stake becomes a principal-bearing FNFT and each interest payment can be claimed through the interest-bearing FNFT at any time. Principal FNFT - This is the FNFT where the original sum of tokens staked is held.

Interest FNFT - This is the FNFT where the interest from the principal FNFT will be sent. You are able to withdraw the interest accrued at any time.

Synthetic Swap - When you use Resonate to trade your own token, or another token, for a completely different token to diversify your treasury.

Stablecoin Boost - When you deploy stablecoins from your treasury to receive higher than normal yields if you were to just deploy to a stablecoin farm.

Mercenary Liquidity - Liquidity that is deposited into a liquidity pool solely to reap the benefits, leaving the minute that things turn difficult. If mercenary liquidity is not locked-down, its owners will pull LPs at the first sign of market instability and sell the native token into the now more-shallow liquidity pool, pushing token prices into a downward spiral.

Conclusion

• Form a partnership with Resonate and become a launch partner.
• Create a 12-month MIM-USDC LP pool on Resonate and allocate up to $10,000 worth of idle SPIRIT in the treasury for deployment to that pool within two weeks of the passage of the snapshot vote or one week before the public launch of Resonate. $2500 worth shall be deployed at launch, with the remaining $7500 held in reserve for deployment by the SPIRIT team on an as-needed basis.
• Lock-down ~$300k+ of mercenary liquidity for 12 months.
• Diversify treasury with USDC and MIM at a 110.95% multiplier.
• Offer upfront yield payouts on MIM-USDC LPs of 9.77% in SPIRIT.

References

Docs

Audits