ShapeShift

Proposal Discussion

Summary

This proposal seeks to expand the current rFOX staking program to include liquidity provider (LP) tokens from the Uniswap V2 FOX/WETH pool on Arbitrum. This expansion is designed to enhance liquidity, broaden participation, and increase the utility and value of FOX on the Arbitrum network. A separate financial bucket is proposed to track and manage the funds and rewards associated with this expansion, with clear governance over the allocation and source of these funds.

Motivation

Integrating Uniswap V2 FOX/WETH LP tokens from Arbitrum into the rFOX staking program will deepen liquidity on decentralized exchanges, enhancing the stability and utility of the FOX token. Recognizing the full value of the LP tokens in the staking rewards motivates liquidity providers by compensating them for the total risk and capital they contribute. Establishing a separate bucket for managing these funds ensures transparency and targeted use of resources, aligning with strategic tokenomics objectives for the DAO.

Specification

• Eligible Tokens: Uniswap V2 LP tokens consisting of FOX and WETH pairs on the Arbitrum network.

• Reward Structure: LP stakers will be rewarded based on the entire value of their LP tokens, in line with the existing rFOX staking mechanics.

• Financial Management: Creation of a separate financial bucket to manage the influx and allocation of resources specifically for this expansion.

• Source of Funds: The specific breakdown will be voted on. The funds will either come from current 25% of RUNE fees allocated to fox stakers or 25% of RUNE fees that are swapped into FOX and burned.

KPIs

• Total Value Locked (TVL) on Arbitrum: Aim for a 10% month-over-month increase.

• Net FOX Deposits vs. Withdrawals Across Chains: Ensure a positive net amount each month, indicating growing or stable liquidity which supports sustained liquidity provision.

• Price Stability Index (PSI): Aim for a 5% month-over-month growth of the PSI, getting smaller as the PSI is closer to 1, which would indicate less price volatility and greater stability.

• Slippage Metrics: Maintain specific slippage thresholds across various trade sizes: under 0.5% for trades up to $1,000, under 1.5% for trades up to $10,000, and under 2.5% for trades up to $20,000.

• Staker Retention Rate: Maintain a month-over-month staker retention rate of 20-30%, demonstrating sustained participant interest and commitment.

Benefits

• Enhanced Liquidity: More FOX and WETH liquidity on Arbitrum improves trade efficiency and reduces slippage.

• Increased Participation: Attracts a broader participant base by recognizing their total investment in liquidity pools.

• Network Expansion: Supports the growth of FOX on the Arbitrum ecosystem, consistent with our Layer 2 expansion goals.

No allocation needed: Exists without monitoring or continuous allocation

Risks and Considerations

• Smart Contract Risks: Integration with new contracts could introduce risks; thorough audits and testing are recommended.

Fracturing existing rfox single-sided fox staker rewards. Existing rfox single-sided stakers will earn less of the total fees, meaning that an individuals return on their fox locked into rfox would be lowered as a result of this proposal passing.

Conclusion

Expanding the rFOX staking program to include Uniswap V2 FOX/WETH LP tokens on Arbitrum, with a separate financial bucket for targeted management and DAO oversight, aims to foster greater liquidity and user engagement. This proposal aligns with ShapeShift’s broader goals of enhancing liquidity, user experience, and network participation.

Vote

For with 50dao/15_rfox_stakers/10_lp_stakers/25_burn For with 50dao/20_rfox_stakers/15_lp_stakers/15_burn For with 50dao/12.5_rfox_stakers/12.5_lp_stakers/25_burn For with 50dao/10_rfox_stakers/15_lp_stakers/25_burn For with 50dao/35_rfox_stakers/15_lp_stakers/0_burn For with 50dao/30_rfox_stakers/20_lp_stakers/0_burn For with 50dao/25_rfox_stakers/10_lp_stakers/15_burn For with 60dao/25_rfox_stakers/15_lp_stakers/0_burn Against

Sorry for those that already voted, an option was left off, has been added.