Sperax DAO

Author: Sperax Core Team

Reference: SIP-63: Demeter 2.0 launch Created: October 9, 2024

Summary

In July 2024, SperaxDAO launched Demeter 2.0, a steady APR farm to increase USDs liquidity and facilitate deeper concentrated liquidity of new tokens with USDs. While the APR wasn’t fixed, it was more predictable than the current model. Reward token managers set and adjusted the APR based on the farm’s Total Value Locked (TVL), providing more consistent rewards for liquidity providers. We used the ARB tokens from the LTIPP program to facilitate a higher reward rate

With the end of the LTIPP cycle, we now wish to take Demeter 2.0 back to a sustainable reward rate. This proposal aims to allocate rewards for new farms being set up as an upgrade to Demeter 2.0

Motivation

Incentivise farms based on the TVL contained in one or more farm assets. Configurable reward rate for all farms which Farm owners can manage Better user experience and improved interaction with the interface New farms with xSPA allocation

Overview

As we reach the end of the high reward period under the Long-Term Incentive Pilot Program (LTIPP), it is essential to review our performance and define the way forward. Despite our efforts to boost liquidity across Demeter 2.0 farms, we were only able to distribute 4% of the allocated 250,500 ARB tokens. The original TVL targets of $20 million in Demeter and $10 million in USDs were not fully achieved.

With the high-reward phase coming to a close, we will transition to a more sustainable reward structure. The future emissions will be adjusted in line with the current Total Value Locked (TVL) in the farms, focusing on providing consistent incentives to liquidity providers based on the existing liquidity. This recalibration ensures that rewards remain aligned with ecosystem participation while promoting long-term liquidity growth.

Our immediate priority is to maintain stability in the reward system and support the ongoing liquidity in the ecosystem. By adjusting emissions to match liquidity levels, we aim to ensure a balanced approach that supports both liquidity providers and the overall health of the ecosystem as we move forward.

Apart from the farm mentioned above, any other farms will follow the following APR structure

Technical Specifications

Demeter farm emissions will be calculated based on the new methodology

Voting

For:

Implement new rewards distribution methodology

Against:

Do not implement the new rewards distribution methodology