Create an SDT pool incentivising SDT liquidity on Sushiswap

Summary:

This is a proposal to add a new strategy to provide SDT liquidity on Sushiswap.

Current situation:

Stake DAO has been rewarding users contributing to the SDT liquidity on Uniswap (current APY ~225%). This has been highly successful, with $18M in aggregated pool liquidity, making SDT the 32th most liquid token on uniswap.

The SDT/WETH liquidity on Sushiswap significantly lags behind, despite being one of the leading DEX on the market and receiving Sushi rewards. By having more liquidity on Sushiswap as well, this would help Stake DAO in the following ways:

  • Increase awareness of Stake DAO for users.
  • More efficient liquidity usage across DEX’s.
  • Contribute to the DeFi ecosystem.

SDT holders would benefit from increased rewards via fees on the Sushiswap platform and stakers benefit from both Sushi and SDT rewards.

High-level explanation of the strategy:

  • User deposits SDT/Sushi liquidity into Sushiswap.
  • Fees generated from swaps are accrued to LP’s.
  • LP’s deposit their LP tokens into an incentivised pool on Stake DAO and get rewarded in SDT.
  • Stake DAO deposits the Sushiswap LP token in Onsen to receive Sushi rewards.

Abstract:

This proposal aims at creating a new strategy “vault” to reward SDT LP’s on Sushiswap.
It is similar to the existing vault rewarding SDT LP’s on Uniswap.

Motivation:

Bring increased liquidity to SDT and increase the visibility of StakeDAO within the DeFi ecosystem.

For:

  • SDT holders and strategists benefit from deeper liquidity across a major DEX.
  • SDT holders and LP’s get rewards and access to greater liquidity.

Against:

  • Dilute earnings on other vaults, however this could also be beneficial.

These are initial thoughts so please provide context and learnings so that we can iterate this into a perfect Tamaki.

17 Likes

Thanks for taking the time to write this up. I think it would benefit is for sure to have liquidity on Sushi. Looking forward to this proposal going to vote.

1 Like

Why not simply migrate all the rewards from Uniswap to Sushiswap? I feel like StakeDaoToken is still to small and illiquid to even consider fractioning liquidity between 2 sources making it MORE illiquid.

This makes complete sense and I fully support.

My one question would be regarding UNI LPs. Would they be able to unstake and restake a portion or all if they so chose to without penalty? I know some people prefer Sushi for their own personal reasons. Would this be splitting up the 5 per block including sushi?