[SIPS-023] Upcoming Trading Contest Rewards Proposal

This forum post is to discuss the upcoming Governance proposal for trading contest incentives for SOMM, Steady-ETH, Steady BTC and ETH-BTC Trend which will go up for vote on Thursday, December 1, 2022.


This proposal is intended to authorize a one-time transfer of 100,000 SOMM from the community fund to a to-be-created multi-sig, which will be used as awards for a trading contest on the Injective blockchain. Injective is a layer-1 blockchain built using the Cosmos SDK that specializes in DeFi applications including exchanges (e.g., Helix, Wavely, and Dexterium), derivatives, prediction markets and options. In addition to being interoperable with Sommelier through IBC, Injective’s exchange ecosystem is primarily orderbook-based, which allows for a different type of trading flexibility for users as opposed to AMM-based exchanges.

The trading contest will incentivize trading of the SOMM, Steady-ETH, Steady-BTC and ETH-BTC Trend tokens. The contest is expected to begin by mid-December and run approximately 2 weeks. The total amount of tokens for the proposed program represents 0.070% of the tokens in the community fund.

Listing on Injective, coupled with the launch of this trading competition, provides a number of benefits to Sommelier:

  • Increase trading volumes: Higher trading volumes would put Sommelier in a better position to integrate with a variety of strategic partners.
  • Expand to new ecosystem: The strategy token asset class, pioneered by Sommelier, becomes available to users in the Cosmos ecosystem for the first time ever. The ability to serve users in ecosystems outside of Ethereum mainnet is critical for Sommelier’s long-term success.
  • Make strategies more accessible: There’s a subset of users that wants to try or participate in strategies, but finds transacting on Ethereum mainnet to be prohibitively expensive. Accessibility is core to Sommelier’s principles. Finding more affordable ways to participate in strategies, like through purchasing directly on Injective, benefits users and in turn Sommelier.

These funds will be used to incentivize trading of the SOMM, Steady-ETH and Steady-BTC and ETH-BTC Trend tokens. Through the contest, a new user base of traders will be encouraged to try strategy tokens exposing them to this exciting new asset class for the first time. Traders are uniquely positioned to understand trading-based strategies which can sometimes be complex for other users. Additionally, they can benefit from the automation of strategies and the ability to remove their emotions from trading since decisions are handled by an algorithm. By purchasing, holding, trading and monitoring these tokens, we believe that these traders will have a sustained interest in strategies on Sommelier and look to make strategies a permanent part of their portfolio. In the future, Sommelier may want to launch similar trading contests on Injective with different parameters - any future program is outside of the scope of this governance action and will require a new proposal.

The tokens prescribed for the contest will be distributed to winners of the trading contest, based on trading volume. In order to receive their prizes, all winners will need to complete KYC (Know Your Customer). If a winner is not comfortable completing KYC, another winner will be selected. In the event that there are unused funds, those funds will be returned to the community fund.

The multisig is currently composed of a mix of early developers on the Sommelier Chain and protocol as well as a contributor to the Injective protocol.

  • Kristi Poldsam
  • Joseph Terrigno
  • Mirza Uddin

This proposal, if accepted, will spend 100,000 SOMM from the community fund to the multisig. The multisig shall be responsible for distributing tokens to the winners of the trading contest.

1 Like

Posting this comment to replace Mizra with Eric Chen, cofounder of Injective, as multi-sig signer.

Posting this comment to update with a multi-sig address: somm1kjdweuvfgzqmrsh52p5edz335aemgalfhpuvfc

Looks like a decent multi approach …

Another thing I like about it is that this proposal keeps with preserving capital
100,000 X 15 cents (about $15,00 in total at the time of this post) while stimulating efforts to find and test for practical uses in The Marketplace.