Premia

Simple Summary

New markets on Premia allow protocol communities to earn yield on their capital while providing long-term accumulation and hedging opportunities to prevent downside token volatility.

The proposal below is to describe the implementation of SPELL/DAI.

Abstract

This proposal is to garner support for adding a new options market for SPELL. The following are the chainlink data feeds:

https://data.chain.link/ethereum/mainnet/crypto-usd/spell-usd https://data.chain.link/arbitrum/mainnet/crypto-usd/spell-usd

Specification and Implementation

Any asset with a Chainlink Price Feed can have a Zero Liquidity Market created. Data collection for surface creation takes approximately one week. Asset markets and emission allocations must be approved by governance vote by the community via Snapshot prior to any live launch. This proposal suggests the following risk market: SPELL [call] / DAI [put]

Motivation

Frogs are one of the most active communities in crypto right now. If Premia even attracts 10% it’s a great improvement for both communities. 

Spell also has no existing options market — this means Premia can (yet again) be a first-mover.

 Also, creating a market for SPELL holders allows for productive communication and positive relationships with Dani and the Abracadabra team.

Eventually, we could see POOL for Spell, as well as the rest of the Frog Nation ecosystem (ICE, wMEMO, Sushi, etc.) as the yields earned for LPs proves profitable.

 Abracadabra (Spell) users and Frog Nation will be happy to find market competitive yield on their holdings, while Premia holders will receive an additional market to earn revenues.

Users of the platform will find a new market for arbitrage and trading, expanding the app’s benefits for all. 

Most importantly, the SPELL DAO will benefit from reduced volatility on their governance token, as it will no longer need to be bought or sold for traders to long and short, and deepen market usage for SPELL as well.

Emissions

With the addition of the SPELL pools on Mainnet, the current Mainnet allocations are as follows:

WETH (35%) WBTC (25%) alETH (15%) ALCX (15%) LINK (10%)

With the addition of the SPELL/DAI pool on both networks, proposed pool weightings are:

WETH (20%) WBTC(20%) LINK (15%) alETH(15%) ALCX(15%) SPELL(15%)

And on Arbitrum… WETH (35%) WBTC(25%) LINK (20%) SPELL(20%)

Given the addition of this new markets, per-block emissions can either maintain the current rate of 0.75 PREMIA per block or be raised to the previous amount of 1 PREMIA per block to provide additional LM support.

If there are more votes for “In favor of” adding the SPELL market, across all three “yes” options combined, than there are votes to “no market”, then the pool will be implemented with the highest voted “yes” option, as the majority want a SPELL market.

VOTING OPTIONS:

Vote In Favor of/In Support of: Add Spell/Dai with no LM incentives (Keep rewards as-is)

Vote in Favor/In Support of: Add Spell/Dai with LM Incentives, with existing block reward amount. Keep 0.75 PREMIA per block (0.375 to Mainnet, 0.375 to Arbitrum)

Vote in Favor/In Support of: Add Spell/Dai with LM Incentives, with extra block reward amount. 1 PREMIA per block (0.5 to Mainnet, 0.5 to Arbitrum)

Vote Against/In Opposition of: adding emissions to the SPELL market