IIP-62 DPI:ETH Liquidity Mining on Polygon

Governance Proposal
1

Title: IIP-62 - DPI:ETH Liquidity Mining on Polygon

Status: Proposed

Author: @overanalyser @oneski22

Created: 29th July 2021

Simple Summary

To encourage the migration of $1 to 2MM of DPI:ETH in liquidity over to the SushiSwap Pool on the Polygon PoS Chain (formally known as MATIC).

1,000 INDEX rewards will be distributed over 30 days (roughly $25,000).

Abstract

Using liquidity mining to attract the initial liquidity (and volume) targets of $1-2MM is expected to unlock a number of additional integrations within the Polygon ecosystem. This proposal is for a one off allocation of INDEX rewards to seed the pool and kick start these integrations.

Motivation

The Polygon ecosystem allows low cost trades, transfers and other DeFi primitives. Having DPI liquidity allows holders to make smaller trades without wasting money on gas. This means that DPI will become a cost effective purchase for many lower value holders.

Having reasonable liquidity on Polygon also unlocks a number of DeFi composability options: DEX liquidity mining / yield farming / use as collateral etc.

While all of our products would benefit from such availability, DPI with an existing chainlink price oracle and large AUM is the ideal first mover.

This one off liquidity mining campaign is intended to help migrate a small fraction of DPI liquidity, $37,000 index over 30 days is a 3.7% return ~ 45% annualised for $1,000,000.

Note: v2 LP’s on mainnet are earning ~15% annualised including trade fees.

While this APY may seem high, should liquidity begin to exceed the higher end of our target range ($2M) we will see APYs decrease to levels below mainnet Uni V3, hopefully ensuring a nice equilibrium.

The proposed liquidity mining is planned to start in August after the end of the DPI:ETH Uniswap v2 Liquidity mining on main net (End date 13th August 2021)

This was the recommended option for DPI during the liquidity mining community call on the 29th July 2021.

Specification

To transfer 1,000 INDEX tokens to SUSHIswap Devs to use as liquidity mining rewards on polygon These will be allocated to the DPI:ETH on the SushiSwap pool on the Polygon PoS Chain for a period of 30 days starting after the 13th August 2021.

FOR

  • To allocate 1,000 INDEX as specified for liquidity mining DPI:ETH on Polygon.

AGAINST

  • No liquidity rewards for Sushiswap on Polygon.

Note: This draft IIP has been prepared before all the details have been finalised. It is possible that deployment via a Sushiswap staking contract may not be possible in the way specified. As a consequence, edits to this proposal may be required before submission for snapshot vote.

Edit 10 August 2021:

  • Additional clarity
  • Calculations adjusted for current index price of $37.00
  • Specification modified as Sushiswap will deploy a join INDEX + SUSHI reward contract and will deploy the INDEX tokens.

Note: Number of iNDEX tokens (1,000) allocated has not changed.

5 Likes
2

@Pepperoni_Joe can this IIP be given a number?

I think there may be some edits dependent on discussions with external partners (on Monday).

Even so, I would like to goto a snapshot w/c 2nd August as I don’t expect to change the spirit of the IIP.

3

I have updated this as IIP-62.

Creating a discord channel next :+1:

4

Flagging that we have paused progress on this IIP whilst we confirm with Sushi whether the proposal is possible.

3 Likes
5

OK, following discussions with Sushiswap Devs. The plan is to do the following:

  1. INDEXcoop IIP to allocate 1,000 IMDEX to DPI:ETH liquidity mining on Polygon (This IIP)
  2. Sushiswap Devs will deploy a farming contract for DPI:ETH on Polygon.
  3. INDEXcoop will transfer the 1,000 INDEX to Sushiswap devs to deploy as rewards.

Timing is TBC, but it is hoped that Liquidity rewards will start before the end of August (ideally w/c 16th August 2021)

Edits to IIP proposal 10 August 2021:

  • Additional clarity
  • Calculations adjusted for current index price of $37.00
  • Specification modified as Sushiswap will deploy a join INDEX + SUSHI reward contract and will deploy the INDEX tokens.

Note: Number of INDEX tokens (1,000) allocated has not changed.

@oneski22 fyi

6

@Pepperoni_Joe

Please line this up to start as soon as possible. (I accept I’ve missed the Monday kick off)

2 Likes
7

Is there already a bridge for our DPI tokens?

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Yes, you can move DPI over the polygon bridge.

The interface run by the foundation can be found here:

9

Okay, great - thanks!

1 Like
10

Any news on this?
I saw Sushi is now offering a MVI:ETH farm with MATIC + SUSHI rewards.

11

@overanalyser

The GovOps WG is seeking clarity on the execution of this IIP; please advise. If unexecuted and no further work is planned please note here as the GOWG is preparing an omnibus IIP to address.

cc: @sixtykeys @Lavi @Mringz @Pepperoni_Joe

1 Like
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Hi @mel.eth

The aim of this proposal was to get DPI liquidity kick-started on polygon. Unfortunately, it has been overtaken by events.

  1. The proposed joint INDEX+SUSHI farm contract has not been deployed on polygon.
  2. Quick Swap have started LM mining DPI:ETH and have got $2.5 M AUM in the pool which exceeds the goal of this pool.

As such, I see no benefit to pushing this IIP forward to completion as it would result in additional Dev work, result in split pools on polygon, spend INDEX with little likelihood of moving the needle for our customers in terms of trade experience.

Therefore, I would prefer to cancel the IIP and allow the time and INDEX to be better spent on other activities.

I’m not sure of the proper process to cancel an IIP so would appreciate any feedback.

cc @LemonadeAlpha for info.

3 Likes
13

Thanks for the update @overanalyser; the GovOps WG is going to prepare an omnibus IIP to address open IIPs. I will note the reasoning here in that forthcoming cancelation proposal and flag for your review once it’s in the forum. Should that IIP fail we will assess and adjust as required.

1 Like