SIP-20 Revising SUSHI LP rewards 11/29/21

Proposals
#1

Proposed

Reduce SUSHI/USDC liquidity provider rewards from 10K per day to 5K per day effective November 29th, 2021.

The current reward rate of 10K per day represents an emission of 3.64MM 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.

Currently 70,000 SI tokens per week (approx. 10K SI per day) are being used to reward SUSHI/USDC Sushi LPs. At current SI prices the current reward rate results in ~90% APY on ~$5M of provided liquidity on SushiSwap.

This SIP proposes to reduce staking rewards starting Monday, November 29th to 5K SI per day.

#2

Current daily SI trading volume doesn’t justify paying such high rewards to support all the liquidity. Lowering the rewards might result in some outflow of LP funds, however the remaining LPs stand to benefit from volume spikes, as happened recently when Sushi LPs earned equivalent of ~180% APY from trading fees during a high-volume day.

#3

Totally makes sense!

#4

Important for long term.

#5

can we consider a tapering of the rewards to decrease it by 2K si per week to a drop to 5-6K si a day instead of a drastic drop?

#6

Hi Crypto3121, We discussed this idea. The act of changing the contract is very labor intensive and requires the vote each time. As such we have proposed this course of action as we believe it to be the best use of time and resources.

#7

The proposal is up for voting now until tomorrow: https://snapshot.org/#/sirenmarkets.eth/proposal/0x87a50d27856f39fd041b32abe9351ac4568fbe63227ca96205eb464839de5036