Premia

On 30 Nov 2021 Premia launched on Arbitrum. In order to reduce gas fees for users, Premia proposes to move 9.5% of current Mainnet Sushiswap liquidity to Arbitrum Sushiswap.

Objective: Reduce gas fees on swaps by up to [95%]

Amount: 9.5% of current Mainnet Sushiswap liquidity or USD [1.3] million equivalent as of proposal date

Timing: In the event of positive vote, liquidity will be re-allocated within 3 days and will remain on Arbitrum unless a new proposal arises.

Considerations & Risks:

• The only difference between Mainnet Sushiswap and Arbitrum Sushiswap is the execution network (chain). It is the same protocol, and both chains settle transactions on ETH mainnet.
• The main risks of this re-allocation (versus leaving the liquidity where it is currently) are unforeseen Arbitrum vulnerabilities.
• Arbitrum appears to have very low incremental risks versus Mainnet, as it settles to ETH mainnet and has had no issues since launch, technical audits are satisfactory, and has comfortable liquidity growing to over $2.12 billion Total Value Locked. More information is available on: https://defipulse.com/blog/what-is-arbitrum/ and https://arbitrum.io/bridge-tutorial/
• Accordingly, our view is any such unforeseen vulnerabilities appear to be low probability as of the proposal date.
• The Impermanent Loss (IL) exposure, or the risk associated with potential losses due to asset price movements (https://www.youtube.com/watch?v=8XJ1MSTEuU0), should not change, so there appears to be no material increased IL risk as a result of this liquidity reallocation.