Proposal for the V3 Deployment

In Short:

Given that our V3 is prepared for deployment, it introduces possible alterations regarding the functioning of emissions in SpiritDAO and how we should provide incentives for it in both our existing V2 and the upcoming V3. It’s also not a secret that with the DAO has been sometimes slow in terms of catching the market. In this proposal, we are trying to decide on enhancing the efficiency of gauge emissions in V2 and incorporating V3 into the equation. Additionally, we ensure that we keep the DAO's pace on the necessary adjustments in accordance with market conditions and the opportunities presented by the volatile nature of the cryptocurrency market.

Background:

The Algebra team has entered into discussions with the SpiritDAO representatives to collaborate on the codebase of SpiritSwap and implement concentrated liquidity into the platform. Now that it’s successfully finished, SpiritSwap will become the first DEX on the Fantom blockchain to introduce the V2 version of Algebra's concentrated liquidity.

These potential changes also entail determining how to allocate the highest incentives for liquidity in a DEX, specifically the emissions between V2 and V3. To ensure the most optimal path for the DAO and foster collaboration between V2 and V3, we must modify the emission rates for V2 and incorporate the emissions for V3.

The Proposal:

We are planning to divide the SpiritSwap farms into two, the V2 gauges and the V3 Algebra Farms.

V2 FARMS (SpiritSwap V2 Gauge Proxy)

V2 farms will be the farms that are already existing in V2 except the farms that will be in V3, and they will get 60% of the emissions:

 - DAI-FTM
 - fUSDT-FTM
 - LQDR-FTM
 - FRAX-FTM
 - MIM-USDC
 - FRAX-USDC
 - fUSDT-USDC
 - DAI-USDC
 - sFTMX-FTM
 - linSPIRIT-SPIRIT  

As you can see, we are adding the linSPIRIT-SPIRIT pair as a votable gauge, and that's because we'd like to support the winSPIRIT wrappers as a gauge from now on. We have talked with the Liquid Driver and they have told us that they would be willing to take their $90K POL to us, as they would now be able to get emissions based on the votes they receive.

This would not be the only winSPIRIT gauge we are attempting to revive, as we are open to adding any gauge of a winSPIRIT pair as long as a mutual ground could be reached. We really want to support the pegs/demand of the winSPIRIT pairs, so the other winSPIRIT projects can easily get in contact with us/create their own proposal to be added onto the gauges + become a votable pair.

From now on, there won’t be any sAMM, vAMM or admin gauge proxies at our V2, and the inSPIRIT holders will be able to vote on any pair that they would like. We are planning out a system like this to:

a) To increase demand for the winSPIRIT pairs

We suggest the implementation of a system wherein inSPIRIT holders have the ability to vote for their own token. At present, all winSPIRIT pairs have lost momentum and are being traded off-peg. This situation not only undermines the importance of voting power for $SPIRIT but also puts the largest inSPIRIT holders at a disadvantage as they are impacted by the off-peg trading.

By enabling inSPIRIT holders to vote for their own token, we can empower them to enhance the liquidity of their winSPIRIT project and support its peg. This system will allow influential participants like linSPIRIT, who have consistently contributed to the ecosystem, to have more influence in maintaining the peg. Additionally, if other winSPIRIT pairs are willing and able to open their gauge with a proposal, it will help increase liquidity for well-performing pairs such as rainSPIRIT, binSPIRIT, and tinSPIRIT on the SpiritSwap platform.

b) To increase demand for $SPIRIT

By increasing the demand for linSPIRIT-SPIRIT pair, and potentially other wrappers, we can naturally boost the demand for $SPIRIT. Since $SPIRIT is the only pair that can be matched with winSPIRIT tokens, a rise in winSPIRIT demand will lead to an increased demand for $SPIRIT. Consequently, this would enhance the overall demand for $SPIRIT, resulting in higher APRs offered by SpiritSwap. The increased liquidity will create a positive feedback loop, driving more fees, improving the performance of $SPIRIT, and further increasing demand.

c) To simplify the voting process

To streamline the voting process, we are introducing a simplified approach. Users will now be able to click on the pair they want to vote for and allocate their 7-day emissions to those specific pairs using their voting rights. There will no longer be separate voting for vAMM and sAMM, as everything will be consolidated under a single gauge proxy, simplifying the voting experience for users.

V3 FARMS (Algebra Farms)

We are planning to allocate 40% of emissions to the AlgebraFarms on the V3 version of SpiritSwap. We’ll incentivize liquidity provision in the following 4 essential pairs within AlgebraFarms:

 - USDC-FTM 
 - ETH-FTM
 - BTC-FTM
 - SPIRIT-FTM 

These rates will be enabled by the SpiritSwap team to dynamically adjust the rates within the AlgebraFarms to maintain a balanced and sustainable ecosystem. This flexibility allows for effective management of rewards and ensures optimal incentives for liquidity providers.

By implementing the above proposal, the SpiritSwap DAO will create a vibrant and inclusive ecosystem that prioritizes liquidity provision, farming incentives, and keeping decentralized governance in 60% of the emissions while controlling 40% of the emissions, just like how it was in V2 except a 5% difference.

Additional Changes:

To ensure the DAO remains constantly updated with the latest developments in the world of cryptocurrency, we propose granting the AdminGuru team, acting as custodians of the DAO, the following rights without requiring a DAO voting process:

1. The ability to modify the emission rates on V3.
2. The authority to add or remove farms from both V2 and V3.
3. The power to adjust the emission rates between V2 and V3.

It is important to note that the DAO retains the option to disable this feature through a separate governance proposal if desired.

This would allow for:

Faster reaction time to potential changes in the market conditions We’ll be more competitive amongst DEXs thanks to our $SPIRIT incentivizations on top of the concentrated liquidity feature

It is crucial to have a dedicated team that can allocate their time and resources to swiftly act in favor of SpiritSwap. If this proposal is accepted, going forward, AdminGuru team will play a crucial role in expediting important tasks such as adding or removing a gauge and adjusting fixed emission rates. These actions can now be carried out without the need to wait for the standard 7-day period, which will be facilitated with the feedback of our DAO on our various social platforms.

Conclusion:

While still allowing 60% of the emissions to be decided on via governance (It was 65% before this proposal, as vAMM and sAMM combined for 65% of the emissions on our V2), SpiritSwap DAO will get a chance to move onto V3 with farms incentives, decided swiftly by the team accordingly to the market conditions.

Voting:

YES: Vote yes for the proposed changes, as SpiritDAO’s emissions will be divided 60% in V2 and 40% in V3 Algebra Farms according to the proposal, and giving the AdminGuru team the right to adjust emissions & pairs accordingly to the market conditions and opportunities.

NO: Do nothing.