SIP-5 Make Sushiswap Safe

Background:

Unlike recent forks, Sushiswap employs its own contracts, which means the risk of smart contract bugs are higher than protocols that simply fork other project's code.

To ensure long term survival of the Sushiswap platform and incentivize user loyalty, I propose a small percentage of the dev pool be used to incentivize $SUSHI holders to provide coverage for Sushi contracts on Nexus Mutual.

Insurance products in DeFi are highly underexplored. Currently, Nexus Mutual is the only platform that supports the flexible coverage Sushi requires. In case of a smart contract bug that traps user funds, users who purchased cover on Nexus Mutual can be protected.

Benefits:

Benefit to liquidity providers: can insure against potential smart contract failure and loss of funds

Benefit to users: signals developer confidence in contract security

Benefit to developers: attract more demand for SUSHI as Sushiswap becomes a safer product.

Economics:

The development pool allocation currently sits at 10% of all inflation. A 10% cut of that means 1% of all inflation will be used to incentivize Nexus Mutual stakers.

During the initial 10x bonus period (first two weeks since master chef contract goes live), 1000 SUSHI will be minted per block. After the first two weeks, 100 SUSHI will be minted per block.

Assuming the price of $7/SUSHI and 10% of dev pool (1% of all inflation) is used to incentivize Nexus stakers, this implies roughly $7M first month, or $21M in SUSHI rewards. Currently there is roughly $22M staked for Uniswap contracts on Nexus; assuming conservatively that Sushi covers will be similar to Uniswap, this implies ~100% APY for those who provide insurance coverage for SUSHI.

Alternatively, we can also explore using 5% of dev pool only, which will still result in a 50% APY for Nexus stakers.

Detailed numbers here for review:

https://docs.google.com/spreadsheets/d/1o293irtRAbIEYarY0x8EBMvHL8BF i4KaAtdtT1JYNAo/edit?usp=sharing