Title: IIP-62 - DPI:ETH Liquidity Mining on Polygon
Created: 29th July 2021
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).
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.
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.
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.
- To allocate 1,000 INDEX as specified for liquidity mining DPI:ETH on Polygon.
- 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.