SIP#23 - Data Driven Emissions Modifications

Background

Stargate currently incentivizes a number of pools (USDC, USDT, ETH, DAI, SUSD, FRAX and LUSD), targeting a general TVL (total value locked) for each pool. Currently Stargate’s TVL in some pools is higher than needed to support current and projected transfer volumes and/or the protocol is emitting more emissions than needed resulting in APRs that are higher than the minimum required to incentivize the required TVL in those pools. By aligning emissions with pool utilization, the protocol can target an optimal TVL for each pool. This will allow for more efficient emissions to truly support protocol volumes with a goal towards overall reduction of emissions.

Proposal

Stargate should align emissions with pool utilization. This would allow the protocol to target an optimal and healthy TVL for each pool to facilitate the transfer of value and provide efficient liquidity. An overall emission reduction would also be targeted as protocol owned liquidity and protocol efficiency continues to improve.

Success

A successful implementation will ensure there is enough liquidity in each pool to support historical transfer volume. In tandem a community driven goal would be implemented to reduce overall emissions to continually aim for a state where protocol revenue is higher than emissions.

Execution

The protocol will periodically adjust emissions based on historical transfer volumes and calculated liquidity required to support them. The protocol will then either increase or decrease the amount of STG or equivalent token given out incentives to hit those targets.

Summary

Stargate currently incentivizes liquidity across a number of tokens. Stargate will proactively work to adjust emissions to efficiently incentivize the required pools. This will allow the protocol to function more efficiently with a general goal of emission reductions if warranted.