I agree to renew V2 rewards but would like to allocate some rewards to single-sided staking. Single sided staking is attractive to risk-averse investors who believe in the project, not everyone has an appetite for liquidity pools/ the risk of impermanent loss
Hi @vd_eth, thank you for putting this proposal together. Are the LP rewards proposed above based on a 1-year term? Considering the current SFI price, having $1,000,000 TVL aggregate between sushiswap+uniswap would result in 13.75% APR overall for those pools.
I also think there should be a requirement added that SFI for these new rewards is newly minted. Previously the SFI supplied to the SaffronStakingV2 contract was taken from the team’s already-minted allocation in order to mitigate any negative effects of minting new SFI.
This seems too important to pass by without mentioning it again. Discussion around this is highly encouraged. I think it’s best to have the community decide on exact allocation amounts.
I am against new incentives for LP as proposed. It’s dilutive, 2020-style, non-sustainable, and big liquidity is not absolutely necessary for the project at this stage. Saffron first needs to become a fee generating protocol and widely used. Otherwise big liquidity is mainly an exit for existing token holders who are losing faith in the project. But if saffron wants at least some liquidity on exchanges I suggest saffron does it the way a few other protocols have done: Sell some native token (SFI) to investors for ETH. Then pair this ETH with SFI, so saffron can act as a LP itself. It’s called protocol owned liquidity. From there on there always is some liquidity, no more dilutive incentives needed in the future. Saffron could even use Balancer (for example), apply for a gauge and attract further liquidity from the public because of the BAL-incentives. Of course there are trade-offs: The amount of liquidity is smaller compared to the plain vanilla incentive scheme used until recently. Let’s take the example of 2750 SFI to get 1 M of liquidity at 13.5% APR. By selling half of the 2750 SFI for ETH and pairing those SFI with the other half of the 2750 SFI, Saffron gets 160’000 USD of liquidity at current prices instead of 1 M. But again: no further cost for the protocol and not only for 1 year. And yes, it would need some effort to to do this whole thing instead of just updating the existing incentive contract.
Protocol without liquidity could be seem as dead for potential new users imho.
Sustainability of LP rewards depends on the right amount of rewards.
Selling SFI tokens to “selected investors” is not much different from LP rewards for the risk of impermanent ETH loss. However, it is more centralized approach which is against the ethos of web3.
Agree that Saffron should have some liquidity on at least one dex. In my opinon one dex is sufficient for now.
Disagree with the centralization concern. Saffron already has a treasury with SFI. It would only be added some LP-tokens. Whether this treasury-address is managed by a multisig or ultimately by a DAO is another question. And it is not about selling to “selected investors”. There are several possibilities out there to open it up for everyone. No idea about legal concerns, but it is 100% in the ethos of web3. And again - it would be beneficial for Saffron and its investors. Had Saffron done this before the project would have saved a ton of SFI spent for LP-incentives over the last two years. But anyway - just an idea.
This is a great discussion and it sounds like many are in favor of renewing rewards but there is some debate as to the specifics of how to renew them (i.e. do we stick with the same reward parameters from last year or adoption new ones, etc). In order to properly move this onto Consensus and vote on this we will need the community to identify some options to vote on - @vd_eth , @aka , @SaffronKing and others we’d love to hear what you guys come up with ITT.
Also, we definitely want as much participation as possible from our community in this regard, so if you’re lurking here and haven’t signed up yet we’d love for you to weigh in.
Hi all- I’m not a programmer or even fluent in any of the lingo you all use, but I’ll chime in that some rewards for continued staking makes sense unless there’s no need for user based liquidity. However I’d caution against minting new tokens as it seems that inflationary tokens have been completely and utterly destroyed… I’m not sure what the answer is but I like that there’s a cap on the 100K token amount!
@vd_eth if you could do the honors and post this in Consensus Check I think we’re good to go. I think we forgot to also include the idea mentioned in this thread of including a suggestion for protocol owned liquidity, so if you would like to add that as a fourth option that would be great so we can represent all positions in the poll. Once that is done I’ll go ahead and direct people to it for the weekly.
