Proposal: Reduce SI/ETH staking rewards from 17.8K per day to 10K per day effective August 5th.
A dual SUSHI / SI farm will be launched on August 5th 10 PM UTC on MasterChef v2, which will provide additional incentive for liquidity providers.
Currently 125,000 SI tokens per week (approx. 17.8K SI per day) are being used to reward SI / ETH Sushi LPs. At current SI prices the current reward rate results in ~90% APY on ~$5M of provided liquidity on SushiSwap.
This reward rate represents 6.5MM SI per year, while the Foundation community fund contains approximately 25MM SI. This rate of emission is not sustainable for the project in the long term given the need for SI to fund other community development activities. The constant emission of SI at a high rate also produces a constant downward price pressure on the token.
This SIP proposes to reduce staking rewards starting August 5th to 10K SI per day.
Several factors will mitigate the potential impacts of this change to SI/ETH liquidity:
A dual SUSHI / SI farm will offer SUSHI rewards in addition to SI, which will provide additional incentive for liquidity providers.
The SIREN DAO will move the project-supported liquidity from Uniswap v2 to Uniswap v3 in order to increase the capital efficiency and offer deeper DEX liquidity to offset any potential reduction in SushiSwap LP capital.