[SIPS-072] Incentives Proposal for Turbo swETH
This forum post is to discuss the upcoming Governance proposal for liquidity incentives on the Turbo swETH Cellar, which will go up for vote on Monday, August 28, 2023.
Description
This proposal is intended to authorize a one-time transfer of 100,000 SOMM from the community pool to the CellarStaking contract, which will be used to 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 0.077% of the tokens in the community pool.
These funds will be used to incentivize participation in the Turbo swETH Cellar. In the future, Sommelier may consider launching similar incentive programs with different parameters. Any future incentive program is outside 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 TurboSWETH in Sommelier’s staking contract. The CellarStaking smart contract (cellar-staking/CellarStaking.sol at main · PeggyJV/cellar-staking · GitHub) governs the bonding of TurboSWETH 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 TurboSWETH tokens deposited, multiplied by a “boost” determined by the amount of time those cellar shares are locked for. Shares receive a 100% boost by locking for 14 days.
This smart contract, 0x69374d81fDc42adD0Fe1Dc655705e40b51B6681b, 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 TurboSWETH 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
Sun Raghupthi
Kevin Kennis
Joseph Terrigno
Stephanie Vaughan
Kristi Polsdam
Crispy Mangoes
This proposal, if accepted, will spend 100,000 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:
0x69374d81fDc42adD0Fe1Dc655705e40b51B6681b
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