Rotate the pools we incentivize

Summary
Have a set of reward pools that rotate to bring in new liquidity and users to SushiSwap and stay relevant

Abstract
SushiSwap is an AMM (Automated Market Maker). This is the core business. Value of the core business grows when we get more liquidity (providing less slippage for users) and more volume (providing more rewards to LPs and SUSHI holders). The main tool we have for bringing in liquidity is the SUSHI reward pools. We should therefore optimize how we deploy these pools to increase value.

Instead of locking ourselves into a fixed set of pool I propose that we keep a core set of fixed pools and add a rotating set of pools to continually stay relevant and bring in the highest value pools. Let’s call it the ‘Menu of the week’.

How we pick the pools to be included could be:

  • The highest volume pools on Uniswap (to bring that volume to SushiSwap, maybe need to skip pairs that have high volume because they are incentivized as UniSwap LP on another platform)
  • The highest volume pools on SushiSwap (to encourage new tokens to start on SushiSwap instead of elsewhere)
  • Do a community vote
  • Let 0xMaki decide
  • Other ways

Specification
I think we can have long discussions about this, but meanwhile we’re losing value, so I propose we just pick 10 pools that make some sense and assign them a reward of 0.2x to kick things off. The reward will only last 7 days and by then we should have the next list.

  • xSUSHI-ETH (That’s our token, we should have some liquidity)
  • cDAI-DAI (earn COMP, compound interest, trading fees AND SUSHI)
  • WBTC-ETH ($21M volume in UniSwap)
  • CREAM-ETH (even better if we can be one of the CREAM reward pools, but let’s at least have some liquidity here, we’ll pick up volume through arb)
  • FTT-ETH (with a little wink to @SBF)
  • NXM-ETH (add some relevance to our pairs)
  • yUSD-ETH (because cool, maybe pair with stablecoin instead)
  • renBTC-WBTC (lots of idle capital sitting around here)
  • yyDAI+yUSDC+yUSDT-ETH
  • CRO-ETH ($3B marketcap, sitting idle)

Yes, yes, yes, I know… you all have opinions on which pairs should be listed, let’s leave that for later. I tried to pick a bit of a wild list with several experiments… some might work, some might not… it’s only 7 days and only a 0.2x reward multiplier. I recommend here we choose action over endless debate and just start with this and figure out how to decide a weekly update as we go on.

Why?

  • Bring in new liquidity
  • Bring in new users into the ecosystem (different coins, different groups)
  • Bring more volume
  • Stay relevant, create buzz around new pools
  • Fun!

Why not?

  • Other pools lose a small amount of yield. Longer term we can probably retire some of the main pools.

Poll

  • Yes please! (even though I don’t like all your pool choices)
  • Nah

0 voters

6 Likes

YES.

Myself and someone else put together a couple related proposals here and here.

Pool incentives are not allocated in an efficient manner right now and this is taking a toll on volume.

Optimizing pool incentives is one of the biggest levers for increasing volume and growth - and also something that involves constant revision based on week-to-week and even day-to-day market trends, so I think it’d be highly beneficial to have a Discord channel devoted purely to this, something like #pool-incentives.

5 Likes

Yeah, but because this can easily turn into an endless debate I tried to focus less on the exact details and just get moving. There are NO technical implications at all and none of this is permanent. If we can just get this going (since there’s a 48h time-lock as well) fast, then y’all can debate the details later. Also, I would propose that if this proposal gets enough upvotes, to already add the pools to the timelock and create a proposal in core after, for 24-36h… if that proposal fails we can cancel the timelock commands before the 48h is up. Let’s get moving on our core function.

4 Likes

Like this. Let’s do it.

We can have endless debates for the 7 days while these pools are incentivized :slight_smile:

3 Likes

Agree on getting this going and action over endless debate.

We also need a venue to get discussion going on this in a more rigorous, data-driven way for future updates, and I think a discord channel is needed for that.

2 Likes

This might help a little bit I guess :man_shrugging: . In the end 0.2x rewards for one week is still not very attractive IMO. You’d have to get in at day 1 with a fairly high balance to make the transactions alone worthwhile. But there should be enough whales to fill the pools.

There is still a core issue that we don’t have any LP incentive over Uniswap for unfarmed pools. We can rotate every week until we are dizzy but just like credit cards with rotating bonus cash back, people will just prefer consistent higher returns over temporary promotions. Uniswap has the volume and LPs will choose the higher volume platform to get paid in fees over swapping to Sushiswap liquidity for just a weeklong promotion.

But this is worth a shot to at least attract larger LPs a week at a time.

Some of the suggestions are a bit of an eyebrow raiser, but I agree that we shouldn’t loose too much time splitting hairs there. It’s a good list.

Yeah, some good points. I think one benefit will be that once a pool is established, some liquidity will always stay. If liquidity drops low, fees from arbitrage will get really good, making it still worthwhile for a few ppl to stay in. Longer term I love the idea of staking the LP underlying. This means that you can deposit to the SUSHI/ETH pair for instance, and a large chunk of the SUSHI gets put into the SushiBar to earn and a large part of the ETH gets put into yETH or cETH or aETH. That will provide a huge edge over UniSwap for any pair :smiley: - but one thing at a time…

3 Likes

Great idea! Can’t wait!!

100% with this, hope to see us implement it asap. The sooner the better.

2 Likes

Absolutely yes. Full support for this proposal

I am up for the menu of the week to be implemented ASAP. It is up for the team to decide which pair to choose. Long discussion = loose time. If the community is not happy with performance it will let know and vote for a roll back.

Since there are 38 votes in favor and 0 against, I’d say we take this to a formal vote in Core and simultaneously add the commands for this to the timelock so when the vote passes, we’re already well into the 48h timelock. If it doesn’t pass we can cancel it before the timelock is done.

1 Like

we need to add FTX BULL and BEAR tokens! we will have more volume than uniswap soon if we focus on this.

Sure, I don’t care much which tokens we add as long as we rotate… But let’s keep that discussion for the next round.

1 Like

instant shorting and leverage- hedgable IL for LPs. we need the volume and TLV.

here is my proposal, pls support it!

I like the proposal, but I think it’s important that the SUSHI pool always have the highest APY since it’s the biggest risk.

Sounds good, as long as already present pools don’t get delisted from the platform entirely.

Quick update on where this is at. Looking at the feedback I think we should move ahead and have a proper vote as well as starting to queue the actions needed into the 48h timelock. Before we start the vote, I’ve created the changes needed to the SUPERPOWAH calculations that also gives some fair voting power to xSUSHI holders, but this is stuck with @0xMaki who is sleeping and Snapshot (who needs to deploy the change, but probably needs the ok from Maki). Once this is done we can get the vote up and queue the new pools… except… the pools aren’t yet created… I’ve just created one, but someone needs to create the others (not the cheapest thing and I don’t feel like selling SUSHI to pay for it). Since we don’t have any discretionary funds yet (anyone wants to help me get this organized?) this is in limbo right now… these are the pools we need:

Any help would be great to get this moving forward. If you want to help moving some things along, feel free to ping me on Discord.

2 Likes

Snapshot updated - moving forward from now

1 Like