SIPS-069 Upcoming Liquidity Mining Incentives Proposal on Summer.Fi/Ajna

This forum post is to discuss the upcoming Governance proposal for liquidity incentives for Real Yield ETH - WETH and Real Yield BTC - WBTC pools on Summer.Fi and/or Ajna, which will go up for vote on Monday, August 14, 2023.


This proposal is intended to authorize a one-time transfer of 100,000 SOMM from the community pool to a multi-sig address somm1z4m2h92uy7vtwl6zuwmtmurxd9eksacs70rt0k on Sommelier. These tokens will be used to incentivize liquidity on Summer.Fi and/or Ajna. Summer.Fi is a platform that empowers users with the most robust DeFi tools, enabling seamless management of their positions across multiple protocols. Summer.Fi has recently integrated with Ajna protocol, a peer-to-peer lending system that enables users to lend their cryptocurrency and borrow it at market-driven rates. Ajna’s target markets and users include those borrowing against any cryptocurrency, like Sommelier’s vault share tokens.

Two pools for Sommelier vault shares have been created on Ajna and will be integrated in the Summer.Fi interface. These pools are YieldETH - WETH for Real Yield ETH and YieldBTC - WBTC for Real Yield BTC. Incentivizing lending liquidity in the pools via SOMM would allow YieldETH and YieldBTC to be used as collateral for the first time ever in DeFi. The borrowed assets could be used for additional deposits in Real Yield ETH and Real Yield BTC or other DeFi activities. Making users and protocols of the market aware of the strength of Sommelier vaults as collateral will hopefully unlock a new growth vector for the protocol and result in additional integrations.

In the future, Sommelier may want to launch similar programs with Summer.Fi and/or Ajna with different parameters - any future program is outside of the scope of this governance action and will require a new proposal. In the event that there are unused funds, those funds will be returned to the community fund.

The multi-sig will be composed of a mix of early developers on the Sommelier Chain as well as contributors to the Sommelier ecosystem.

Kristi Poldsam
Joseph Terrigno
Zaki Manian

This proposal, if accepted, will spend 100,000 SOMM from the community fund to a multi-sig address somm1z4m2h92uy7vtwl6zuwmtmurxd9eksacs70rt0k on Sommelier, which will then be distributed as incentives to lenders on the YieldETH - WETH and YieldBTC - WBTC pools.