[SIPS-132] Co-Incentives Proposal for Turbo ETHx

[SIPS-132] Co-Incentives Proposal for Turbo ETHx

This forum post is to discuss the upcoming Governance proposal for liquidity incentives on the Turbo ETHx Cellar, which will go up for vote on Friday, March 8, 2024.

Description

This proposal is intended to authorize a one-time transfer of 55,000 SOMM from the community pool to the CellarStaking contract, which will be used as co-incentivizes for cellar depositors on Ethereum Mainnet. This program will distribute the authorized amount of tokens over a period of 30 days. The total amount of tokens for the proposed program represents 0.034% of the tokens in the community pool.

This proposal is the first of a planned multi-month co-incentive plan with the Stader team. The Stader team plans to provide ~$10,000 in matching co-incentives during this 30-day period. In the future, Sommelier may launch similar incentive programs with different parameters. Any future incentive program falls outside the scope of this governance action and will require a new proposal.

In order to deliver the SD incentives to the vault, we will deploy a claim contract. SD will be distributed via a claim contract allowing vault users to claim at their convenience. An off-chain algorithm will be used to calculate the rewards per user with the Merkle hash being posted to the distribution contract.

The tokens prescribed by the program will be distributed pro rata to users on Ethereum Mainnet who elect to bond TurboETHX in Sommelier’s staking contract. The CellarStaking smart contract (cellar-staking/CellarStaking.sol at main · PeggyJV/cellar-staking · GitHub) governs the bonding of TurboETHX 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 TurboETHX tokens deposited, multiplied by a “boost” determined by the amount of time those cellar shares are locked for…

This smart contract, 0x88EDf544b5d4Ba6A11D40375e4bAEf3f1Ec5aF11, 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 TurboETHX 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 55,000 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:

0x88EDf544b5d4Ba6A11D40375e4bAEf3f1Ec5aF11

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

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