This forum post is to discuss the upcoming Governance proposal for SOMM incentives for Rhino Fi users using the Real Yield ETH vault which is set to go to vote on Friday, June 23, 2023.
Description
This proposal is intended to authorize a one-time transfer of 25,000 SOMM from the community fund to address 0x520Cf70a2D0B3dfB7386A2Bc9F800321F62a5c3a on Ethereum mainnet, the Rhino Fi team’s address. These tokens will be used to provide a modest amount of incentives for the Real Yield ETH vault, which has been listed on the platform and currently has ~$175,000 in TVL. Rhino Fi is a multi-chain DeFi aggregator that offers the ability to swap, LP and most importantly, participate in vaults. The total amount of tokens for the proposed program represents 0.019% of the tokens in the community fund.
As for the benefits, we previously noted the ability to increase Sommelier’s brand awareness and gain a distribution channell. However, an additional benefit has emerged: Rhino offers users a low gas fee option for deposit and withdrawal. Gas fees on Ethereum can be prohibitively expensive, especially for smaller depositors. According to information shared by the Rhino team, 425 users on their platform are in the Real Yield ETH vault, which means that the average deposit size is approximately $400, much smaller than the average deposit of around $44,000 made on the Ethereum mainnet. Improving accessibility to DeFi is part of Sommelier’s ethos, and this initiative furthers that goal.
In the future, Sommelier may want to launch similar programs with Rhino Fi with different parameters - any future program is outside of the scope of this governance action and will require a new proposal.
This proposal, if accepted, will spend 25,000 SOMM from the community fund to address 0x520Cf70a2D0B3dfB7386A2Bc9F800321F62a5c3a on Ethereum mainnet, the Rhino Fi team’s address to be distributed to incentivize participation in Sommelier’s vault, including the Real Yield USD vault.
Can you provide some links/screenshots that illustrate your “low gas fee” option?
Please provide a summary of how the funding in SIPS-034 was spent and the results.
Here are some results from the SIPS-034 Proposal.
In addition to Sommelier vaults being listed directly in the Rhino UI, the Sommelier App UI also offers users the opportunity to make a deposit from the Rhino L2 as shown in the screenshot.
Spend
- A total of 70,000 SOMM was spent on boosting RYUSD yields. Additionally, 20,000 SOMM (a portion of which is reclaimable) was allocated to promoting RYUSD to a targeted group of approximately 150 users who had shown interest in passive yield opportunities. Rhino still has around 10,000 SOMM remaining, which can be allocated to future Sommelier opportunities.
Results
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TVL: At its peak, $630k of RYUSD’s TVL came from the Rhino platform and its userbase. Since Rhino is no longer providing incentives for this opportunity, the TVL figure has decreased to approximately $300k of RYUSD, mirroring the reduction seen in RYUSD TVL on Ethereum mainnet since SOMM incentives stopped (from a peak of $16.5M to $8.5M currently).
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Users: The number of Rhino accounts using RYUSD continues to increase and currently stands at approximately 490. For context, the number of lifetime RYUSD users on Ethereum mainnet is approximately 240.
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Gas Fees: Gas fees for bridging from Ethereum to Rhino and then making a deposit are significantly lower than depositing directly into Sommelier vaults on Ethereum mainnet. Specifically, entering Sommelier vaults from Rhino is more than 10 times cheaper than doing so through Ethereum mainnet. This is because, at 15 gwei, it costs around $3 to bridge to Rhino, and depositing is free. In contrast, making a deposit on Ethereum mainnet costs approximately $37. The savings in gas fees have made Rhino a viable option for smaller depositors, as demonstrated by the user figures above.
Conclusions
SIPS-034 was a promising trial with Rhino and demonstrated the ability to attract a different set of users compared to those Sommelier accesses via Ethereum mainnet. After consulting with the Rhino team, we believe that a smaller program offering a modest yield boost will be most effective in attracting new users to the Real Yield ETH vault.
Additionally, Rhino plans to include the Real Yield ETH vault as one of the featured “quests” in their upcoming marketing campaign, which starts later this week.
Appreciate the additional information. In the event your team has a similar proposal in the future, could you include similar information? We missed your reply and we couldn’t find another party to supply the depth of information when we asked around.