[SIPS-088] Upcoming Osmosis Incentives Proposal for YieldETH

Governance
1

This forum post is to discuss the upcoming Governance proposal for SOMM incentives to bootstrap liquidity for the YieldETH-ETH liquidity on Osmosis. This is set to begin voting on Sunday, October 29, 2023.

Description

This proposal is intended to authorize a one-time transfer of 75,000 SOMM to be distributed over a period of 90 days from the community fund to a multi-sig address somm1n96wzq4yyqakcy3fu0wpan9hpy8m8ttgk5njky on Sommelier. These tokens will be used for incentives on YieldETH-ETH Concentrated Liquidity vault on Osmosis. The total amount of tokens for the proposed program represents 0.060% of the tokens in the community fund.

Providing SOMM incentives to this vault provides a couple key benefits to Sommelier:

  • Increase YieldETH liquidity in the Cosmos: Although Real Yield ETH (YieldETH) is listed on Osmosis, users lack a motivation to bring their YieldETH tokens to Cosmos. The goal of these SOMM are to provide an economic incentive for users to bridge their YieldETH to Osmosis, thereby deepening liquidity. With deeper liquidity, it is easier for interested Cosmos users to gain exposure to YieldETH without going to Ethereum, which can be gas-prohibitive.

  • Support the Quasar YieldETH-ETH Concentrated Liquidity Vault: Quasar will be launching a vault that optimizes the liquidity on this trading pair by dynamically adjusting the upper and lower ranges. This increases capital efficiency and yield for users in the vault.

In the future, Sommelier may want to launch similar programs with Osmosis 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 75,000 SOMM over a period of 90 days from the community fund to a multi-sig address somm1n96wzq4yyqakcy3fu0wpan9hpy8m8ttgk5njky on Sommelier, to be distributed to incentivize liquidity for YieldETH-ETH liquidity on Osmosis.