Potential use cases

We already know that Somm tokens will not have inflation (At least to begin with) .
If we were to build our ideas around a 0% inflation token here are some of them that we could discuss about . These are very very rough ideas and may not even be logical in some cases , but I thought kicking off a discussion would be a good idea .

  1. Requiring at least 100 somm token staked to a validator to be eligible to provide liquidity .
    Con : Will deter LP providers from using the system … possibly ?
    Pro : Assuming providing LP is exclusive to somm holders the quality of long term LP providers would improve and would avoid mercenary farmers ?

  2. Allow staked somm tokens to be proportionately distributed across gov- whitelisted LPs.
    i.e : Staking would mean automatic LP providing .
    Con : Impermanet loss becomes an added risk along with downtime &/or double spend slashing.
    Pro : Revenue from fees earned (from any token) can be exchanged for somm and redistributed to somm stakers . This provides a way to reward Somm stakers without the need for making the network inflationary.
    Assumption : This is assuming community is open to having somm based pools.
    Note : Inspiration is taken from Superfluid staking idea at Osmosis.

  3. Make Somm a deflationary token based on usage i.e : Burn somm every time a liquidity provider decides to exit the system . To ensure they dont get burnt (pun) , the burn would be proportional to a multiple of 0.0x of thier earnings in fees . There can be a stablecoin pool with somm that will be utilized to perform this action.

2 Likes




This website does not constitute an offer to sell or a solicitation of interest to purchase any securities in any country or jurisdiction in which such offer or solicitation is not permitted by law. Nothing on this website is meant to be construed as investment advice and we do not provide investment advisory services, nor are we regulated or permitted to do so. This website is provided for convenience only. Sommelier does not manage any portfolios. You must make an independent judgment as to whether to add liquidity to portfolios.

Users of the Sommelier website should familiarize themselves with smart contracts to further consider the risks associated with smart contracts before adding liquidity to any portfolios.

Note that the website may change, and we are under no obligation to update or advise as to these changes. There is no guarantee that the Sommelier Mainnet, including any software, products or token use cases mentioned on the website, will be built, or offered by Sommelier. In particular, actual results and developments may be materially different from any forecast, opinion or expectation expressed in this website, or documents contained in it, and the past performance of any portfolio must not be relied on as a guide to its future performance.

To the extent permitted by law, the company and its directors, officers, employees, agents exclude all liability for any loss or damage arising from the use of, or reliance on, the material contained on this website whether or not caused by a negligent act or omission. The release, publication or distribution of this website and any materials herein may be restricted in some jurisdiction and therefore you must inform yourself of and observe any such restrictions.