The contracts for StakeWise V3 are due to be deployed in the coming weeks, allowing StakeWise to kickstart the liquidity for osETH as per the approved liquidity strategy. An important part of the launch of StakeWise V3 is the migration of liquidity incentives from the current sETH2 farms to the new liquidity pools. By design, the SLC is structured to be nimble enough to navigate the V3 deployment process, extending the sETH2 incentives up until the time of V3 launch, before transitioning those incentives to the new osETH liquidity pools. To be clear, from the V3 public launch and beyond, all sETH2 farming rewards will cease as approved by the DAO. StakeWise DAO will focus all liquidity incentives to the new osETH liquidity pools and the new ETH-SWISE liquidity pool.
With that in mind, the below proposal looks to allocate SWISE from the StakeWise DAO Community Treasury to the StakeWise Liquidity Committee to be used solely for incentivising liquidity. Please take the time to review and discuss the proposed budget. The snapshot to assign the budget is due to go live on Wednesday 11th October.
Proposed Budget
| Total | SWISE 6,876,089 |
|---|---|
| Extending sETH2 farms | SWISE 3,300,000 |
| SWISE liquidity pool | SWISE 500,000 |
| osETH liquidity pools | SWISE 3,000,000 |
| SLC compensation | SWISE 76,089 |
Breakdown
Extension of existing sETH2 farms
The sETH2 farms are due to expire on the 20th October. A further 4 weeks of emissions are requested to ensure the SLC has enough SWISE to cover their extension until the public launch of V3. If V3 is launched shortly after October 20th, any SWISE left over from the allocation to sETH2 pools will be accounted for in the following month’s budget request. The SLC proposes the same level of incentives as per the previous month for the sETH2-ETH and sETH2-rETH2 pools:
3,300,000 SWISE to be distributed across the pools in the following proportions:
- sETH2/ETH - 3,000,000 SWISE
- sETH2/rETH2 - 300,000 SWISE
New ETH-SWISE liquidity pool
The new ETH-SWISE pool is deployed and we propose to move some incentives from the existing sETH2-SWISE pool to the new pool. We suggest that 50% of the incentives be migrated to start with, followed by the remaining 50% a few weeks later. Historically, the monthly budget for the SWISE pool was 500,000 SWISE in incentives - the SLC requests the same budget, to be split equally between the old and the new ETH-SWISE pool.
New osETH liquidity pools
It is impossible to predict how quickly liquidity will migrate from the existing sETH2 pools to the new osETH pools. What is important, however, is to ensure the SLC has enough SWISE on hand to effectively bootstrap the pools should migration occur rapidly. With this in mind, a SWISE budget is requested to provide the SLC with enough incentives assuming 100% of the current liquidity migrates. That equates to 3,000,000 SWISE (the same as the current sETH2-ETH allocation).
Just like the budget to extend the sETH2 farms, the SLC is not committing to deploy 100% of this SWISE over the next month within the new osETH pools. The SLC will monitor capital inflows and adjust the incentives on-demand to ensure that osETH pools APYs remain attractive and adjust according to demand. Unused SWISE will be accounted for in the next month’s budget proposal.
SLC compensation
$5k in SWISE @ 0.06571 USD per SWISE (30d avg) => SWISE 76,089 (as approved by the DAO during the implementation of the SLC).