[SIPS-129] Upcoming Turbo ezETH Liquidity Mining Incentives Proposal

[SIPS-129] Upcoming Turbo ezETH Liquidity Mining Incentives Proposal

This forum post is to discuss the upcoming Governance proposal for liquidity incentives on the Turbo ezETH vault which is set to go to vote on Sunday, February 25, 2024.

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 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 0.085% of the tokens in the community pool.

These funds will be used to incentivize participation in theTurbo ezETH Cellar which focuses on optimizing opportunities in the Renzo ecosystem. Renzo is one of the largest liquid restaking token providers with over $400M in TVL. We see an opportunity to establish a foothold in this foundational liquid restaking protocol, which seems poised for even more growth. 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 TurboEZETH in Sommelier’s staking contract. The CellarStaking smart contract (cellar-staking/CellarStaking.sol at main · PeggyJV/cellar-staking · GitHub) governs the bonding of TurboEZETH 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 TurboEZETH 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, 0x4705F50b9c6CdffC6528ba6B3754106eE820997E, 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, 0x7340D1FeCD4B64A4ac34f826B21c945d44d7407F 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 TurboEZETH 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

Kristi Polsdam

Joseph Terrigno

Stephanie Vaughan

Sunand Raghupathi

Crispy Mangoes

Josh Kessler

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:

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