[Temperature Check] Saffron Staking V2 parameters

Stage 1: Temperature Check
1

Hi everyone,

Saffron Staking V2 beta testing is underway and ready to be rolled out to mainnet when a sufficient number of bugs have been fixed. One pre-requisite to the mainnet release of Saffron Staking V2 is a decision on three parameters:

  1. Pools to be included
  2. How much SFI to be distributed as emissions
  3. Allocation points per pool (proportional share)

– Included pools –
Currently the Saffron Staking V2 beta pools are:

  1. SFI single-staking
  2. SFI/WETH Uniswap v2 LP
  3. SFI/WETH SushiSwap LP (includes SUSHI rewards)
  4. SFI/BTSE Uniswap v2 LP
  5. SFI/ALPHA Uniswap v2 LP
  6. PRT/WETH Uniswap v2 LP (includes weekly PRT rewards)

I think this is a good start and could remain this way until we have another promotional pool that wishes to match rewards with Saffron in a similar style to Sushi and Portion.

– SFI per block emissions –
The proposed sfiPerBlock is currently 1240079365079365 wei of SFI, which translates to approximately 50 SFI per week distributed. This is half of the previous Saffron V1 emission rate of 200 SFI per week. Due to the relatively few remaining SFI to be minted (approximately 7,250 SFI to reach 100,000 cap) a low amount around 50 SFI per week seems appropriate.

It’s also important to decide the length of time to issue these emissions keeping in mind that there is an inherent trade-off between emissions and treasury funds. Just like any other protocol token mint via governance, SFI minted to fuel emissions takes away SFI the protocol can mint for use as arbitrary treasury funds. SFI per block emissions should also either stop completely or be reduced after a certain period of time. I propose minting SFI once per quarter and re-evaluating sfiPerBlock and the eventual cutoff as time goes on.

One year of emissions would equal approximately 2,600 SFI. For the first quarter of emissions this would require around 700 SFI minted to be on the safe side in case blocktime intervals are shorter than before on average. As time goes on we would have an exact measure of SFI rewarded and could adjust to exact amounts for subsequent proposals.

– Allocation points –
Allocation points determine how much of the sfiPerBlock each pool earns. Currently the allocation points are distributed as follows:

  1. 50.0% to the SFI staking pool (25 SFI per week)
  2. 12.5% to each of the SFI/WETH pools (Uniswap and SushiSwap)
  3. 8.33% to the remaining 3 promotional partner pools

Example from Rinkeby testnet:

Screenshot from 2021-09-26 16-53-52
Screenshot from 2021-09-26 16-53-522398×1744 367 KB

Although this test is on Rinkeby, the APR calculations are accurate, and will have the same output values given the state of the system and its inputs match the testnet values. For example, around $11,000,000 in the SFI staking pool will result in approximately 6% APR on that pool on mainnet when this staking program goes live.

Looking forward to discussion on the topics above and to decide on the direction for this new phase of Saffron V2 together.

-psy image

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I think this suggestion is reasonable. However, the price of sfi must grow well to attract investors to participate.

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Following up on the discussion from Discord, the plan is to set the allocation points as follows:

  • 3375 SFI/WETH pools (UniswapV2 and SushiSwap)
  • 2250 SFI single-staking
  • 225 partner pools

This should incentivize liquidity on DEX pairs adequately while still maintaining value for the SFI staking pool beyond enhanced voting power.

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