Proposal for Community Pool Funding of SOMM External Incentives on Osmosis

This proposal is based on a previous draft discussed in the following thread: Proposal for external incentives on Osmosis


Support the growth of the OSMO/SOMM liquidity pool (627) on Osmosis and reduce slippage.


Currently, Osmosis is the main place to trade the SOMM token. The OSMO/SOMM pool liquidity is approximately $535k USD at the time of writing, with a 24-hour trading volume of approximately $55k. The volume of the pool impacts the ability to trade the token without incurring significant slippage. The pool is incentivized by swap fees (distributed in OSMO) and an additional OSMO subsidy.

It is anticipated that staking rewards for the SOMM token will be implemented in the near future. Staking rewards will provide an incentive for users to stake the token rather than provide liquidity to the pool. This may impact the growth of the pool. However, we can improve the attractiveness of the pool by applying a SOMM incentive in addition to the swap fees and OSMO subsidy.

Osmosis supports a feature called “external incentives”. This feature has been used to great success by other blockchain projects; it enables a project to offer additional incentives to liquidity providers, ensuring the continued success and growth of the pool. By using this feature of Osmosis, we can use SOMM tokens to further incentivize liquidity providers to continue adding liquidity to the OSMO/SOMM pool.

The amount of SOMM to be spent shall be proportional to the current liquidity and potential growth of the pool. The duration of the incentive program shall be such as to allow us to analyze the impact and decide on future incentive proposals. (Note: any future incentive program is outside the scope of this governance action and will require a new proposal.)


I am a token holder and fan of the Sommelier project, and I propose that we allocate 125,000 SOMM to serve as an external incentive for the OSMO/SOMM liquidity pool (Pool 627) on Osmosis. The program will run for 90 Osmosis epochs (targeting 30% APY at 0.30c), and will only apply to the 14-day gauge category. To implement this proposal, the SOMM shall be transferred from the community pool to a multisig on the Sommelier blockchain at the following address: somm1ma2rzqffu7s0fzuzezq66hasvsh5346atljjv0.

The multisig is able to perform the following actions:

  • Interact with the Osmosis Blockchain to create the 14-day gauge external incentives program.
  • Transfer tokens for purposes of creating and funding the external incentives program.

The multisig is composed of myself (Adam Delderfield) and a Sommelier Protocol team member (Sam Patel). The signing threshold is both members of the multisig. Additionally, Collin from the Sommelier Protocol team is helping on the technical side and will assist in putting the SOMM on osmosis gauges.

This proposal, if accepted, will spend 125,000 SOMM from the community pool in order to fund the aforementioned external incentives according to the parameters of this proposal. The multisig shall be responsible for enacting the program according to the parameters of this proposal once the requisite SOMM tokens are funded.


125k SOMM represents 0.09% of the community pool. The full amount will be used to implement and fund the external incentives on the Osmosis blockchain.


If this proposal passes, we will use SOMM from the community pool to fund external incentives for the OSMO/SOMM pool on Osmosis. This will help to increase the available liquidity, reduce slippage, and support the continued good health and growth of the project.