[SIPS-067] Upcoming Real Yield BTC Liquidity Mining Incentives Proposal
This forum post is to discuss the upcoming Governance proposal for liquidity incentives on the Real Yield BTC vault which is set to go to vote on Monday, August 7, 2023.
Description
This proposal is intended to authorize a one-time transfer of 225,000 SOMM from the community pool to the CellarStaking contract, which will be used to further incentivize cellar depositors on Ethereum Mainnet. This program will distribute the authorized amount of tokens over a period of 30 days, starting at the date this proposal passes and is enacted. The total amount of tokens for the proposed program represents 0.172% of the tokens in the community pool.
These funds will be used to incentivize participation in the Real Yield BTC Cellar which has received ~$5M in deposits since launching one month ago. In the future, Sommelier may want to launch similar incentive programs with different parameters - any future incentive program is outside of the scope of this governance action and will require a new proposal.
The tokens prescribed by the program will be distributed pro rata to users on Ethereum Mainnet who elect to bond yieldBTC in Sommelier’s staking contract. The CellarStaking smart contract (cellar-staking/CellarStaking.sol at main · PeggyJV/cellar-staking · GitHub) governs the bonding of yieldBTC and the distribution of the tokens reserved for SOMM rewards. Pro rata allocation is determined based on share of the pool, where that share is equal to the amount of the user’s yieldBTC tokens deposited, multiplied by a “boost” determined by the amount of time those cellar shares are locked for. Shares receive a 10% boost by locking for 7 days, a 30% boost for locking for 14 days, and a 50% boost for locking for 21 days.
This smart contract,0x1eFF374fd9AA7266504144da861Fff9BBd31828e, is based on canonical staking conventions used across the Ethereum Virtual Machine, principally the Synthetix staking rewards contract, originally developed in 2018. Variations of this code have secured billions of dollars of rewards across various EVM-compatible blockchains. The CellarStaking smart contract has been audited by Macro, with the audit available here: cellar-contracts/Macro_Cellar_CellarStaking_07_2022.pdf at main · PeggyJV/cellar-contracts · GitHub
A multisig on Ethereum Mainnet, 0x290a42E913083Edf5AEFb241f8A12B306C19f8f9 and operated by Sommelier contributors, has administrative powers to govern the parameters of the program under a 4-of-7 signing scheme. The staking program must be funded with SOMM tokens directly from the Gravity Bridge; the multisig will not control any tokens reserved for the program.
The multisig is able to perform the following actions:
Schedule a certain amount of tokens owned by the contract for distribution (via notifyRewardAmount)
Set the duration of future rewards programs (via setRewardsDuration)
Set the minimum deposit in yieldETH tokens in order to participate in the rewards program (via setMinimumDeposit)
Pause and unpause bonding operations in emergency scenarios (via setPaused)
Trigger a one-time emergency shutdown on the contract, which stops new reward accumulation and allows all depositors to withdraw their assets immediately, disregarding unbonding times (via emergencyStop).
The multisig is currently composed of a mix of early developers on the Sommelier Chain and protocol, Ethereum smart contract developers, and cellar strategists:
Zaki Manian
Jack Zampolin
Kevin Kennis
Joseph Terrigno
Stephanie Vaughan
Kristi Polsdam
Crispy Mangoes
This proposal, if accepted, will spend 225,000 SOMM from the community pool in order to fund the CellarStaking contract 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 by the validators.
Reference Links:
CellarStaking Contract: cellar-staking/CellarStaking.sol at main · PeggyJV/cellar-staking · GitHub
CellarStaking deployment:
0x1eFF374fd9AA7266504144da861Fff9BBd31828e
Ethereum Mainnet multisig: Safe{Wallet}
Macro Audit: cellar-contracts/Macro_Cellar_CellarStaking_07_2022.pdf at main · PeggyJV/cellar-contracts · GitHub
Synthetix Staking Rewards Contract: synthetix/StakingRewards.sol at v2.63.1-alpha · Synthetixio/synthetix · GitHub