Co-written with 0xMaki (SushiSwap Core Contributor)
Simple Summary
Migrate the entire PoolTogether liquidity mining program from Uniswap V2 to SushiSwap by integrating with MasterChef V2.
Rational:
PoolTogether currently has both Uniswap V2 & SushiSwap for its liquidity mining program ($3.6m TVL on Uniswap V2 vs. $250k on SushiSwap for POOL/ETH) but the UX hasn’t been updated for Uniswap V2 due to Uniswap V3 which can be confusing for newcomers to liquidity provision. SushiSwap is multi-chain (Polygon, Celo, & more) and has an ongoing suite of products rather than just simply being a AMM DEX. The POOL liquidity mining program is eligible for double rewards in the form of SUSHI + POOL which eases the burden of impermanent loss. SushiSwap also has the upcoming release of Shoyu (NFT platform) and Trident (AMM) in the coming months.
SushiSwap Liquidity Mining Benefits:
SushiSwap distributed accrued protocol revenue from 0.3% protocol trading fees between LPs (0.25%) and xSUSHI token holders (0.05%). $xSUSHI is received after depositing SUSHI into a pool called SushiBar; a way to distribute a portion of accrued revenue to token holders. LPs in the Onsen liquidity mining program are also rewarded in the SushiSwap native token SUSHI.
Being multi-chain with a presence on Polygon, Celo, Avalanche, Fantom, and more lays the groundwork to easily migrate POOL to other chains from a single location.
Double rewards by integrating with MasterChef V2 enables projects to add their own incentives on top of SUSHI rewards. These rewards are able to be configured as a multiple of SUSHI rewards or another standard like block hash and block time stamp. MasterChef V2 brings cheaper gas than MasterChef V1 since storage slots on Ethereum are optimized from three to one total slots. Rewards are all now claimed on-demand so the user can choose when and how to harvest their rewards. Double rewards helps ease the burden of impermanent loss for POOL and decreases the price impact/slippage of individual purchases making the process more efficient overall.
Kashi & BentoBox: SushiSwap easily allows lending, borrowing, and margin trading through Kashi which is built on top of BentoBox. BentoBox serves as the vault that securely stores tokens and generates yield from flash loans and strategies for protocols built on top of it. BentoBox holds the tokens while Kashi utilizes the assets stored for lending, borrowing, and margin trading. This could allow POOL users to earn interest lending out their assets to margin traders while earning rewards from liquidity provision or farming.
Trident: Launching in the coming months, the anticipated update for SushiSwap can be broken into three portions: new BentoBox strategies, expansion of pool options, and a new routing engine. Trident grows the expansion of pool options to four pool types. The first being the constant product pool which is made up of an equal monetary value of each. The second type is the hybrid pool which allows users to swap assets with a reduced price impact. Users can include up to 32 assets in a single pool. The third is the concentrated liquidity pool which asks users to specify the token asset’s price range to add liquidity to. This allows providers to more narrowly scope their liquidity provisioning to maximize how much is earned from fees across SushiSwap. The last pool type is a weighted pool which allows different weight types with up to eight tokens in a single pool. Migrating the liquidity mining program will expose POOL to a wide variety of new users and create the ability to route trades through a variety of pool types.
Housekeeping Notes:
POOL liquidity provision will be eligible for double rewards meaning both the existing SUSHI rewards (Currently 18.78 SUSHI per day) and POOL can be earned potentially increasing the existing rewarded amount from the Uniswap V2 liquidity mining program. The size of SUSHI rewards will be decided based on pool TVL and transaction volumes. And it will be adjusted to reflect changes in the pool performances. We have agreed to match the length of the existing liquidity mining program in place.
We welcome feedback from the community on this proposal.
Should PoolTogether migrate the liquidity mining program from Uniswap V2 to SushiSwap and integrate with MasterChef V2?
I’ll return to this after work to write something more at length.
But I’m all for this. I think it makes way too much sense with PoolTogether V4 coming to not embrace a Sushi x PoolTogether partnership. Sushi is on similar chains as PoolTogether, and gives us targets for other chains to enter with a liquidity provider already at our disposal.
This seems like a no brainer partnership. Sushiswap has an eclectic set of product offerings on different chains which can be leveraged by the POOL community. I support the migration of the liquidity mining program over to Sushiswap entirely.
Can you clarify this point? Are the SUSHI rewards programmatic to pool TVL and volumes? If so can you describe how that works. When you say “agreed to match”, do you mean match our current 300 POOL per day incentives on the UNI V2 pool?
I really like Sushi’s community, and diversity of products. You guys are doing a great job.
I think creating LP rewards for POOL on Sushi makes 100% sense.
However, I don’t think our existing program should be migrated. There are Uniswap fans, and there are Sushi fans. I think we should be present in both markets, so we are accessible to as many people as possible.
That being said, if we mirrored our existing LP program on Sushi it would likely have higher volume, as Sushi is sweetening the rewards with their own. Great! More is better.
As for the technical implementation, we’d need some help from the Sushi team in terms of mapping out what exactly that would look like. Additionally, the PT Inc. team is extremely busy right now with V4, so we wouldn’t have a ton of dev lift we can offer. The more out-of-the-box parts we can use, the better.
I would agree with what @Brendan said above, I would like us to be present on both Sushi and UNI. Maybe we can further the partnership by also having some Sushi LP rewards on Polygon where we are looking to expand big time.
Yes SUSHI rewards are determined by pool TVL and transaction volumes. It can fluctuate because of this. The specific equation is just set up for internal use currently.
Some projects only have the liquidity mining program ongoing for a period of time. After that it is renewed or discontinued.
You bring up a fair point. Mirroring the LP program potentially does sound like a great alternative. We would welcome that.
No worries! Regarding the technical implementation portion we understand most teams are busy building. As such we strive to make it as hassle free as possible. We can loop you guys in with our team for more guidance and further assistance.
I think it makes sense to have LP rewards on both. We should keep the total incentive amount the same. So if we add 150 POOL incentive to Sushi, we should reduce the Uniswap incentive by 150.
I also think getting some Sushi LP rewards on Polygon would be very nice. Is that an option @SushiSenpai?
I look forward to seeing more PoolTogether x SushiSwap collaboration on various networks (Ethereum, Polygon Matic, BSC and more).
Speaking of more PoolTogether and SushiSwap collborations, I would love to see the POOL token and PoolTogether pool tokens/tickets supported on the Kashi market. I am sure many users would love to have this has an option.
I would like to do more with Sushi but I think we should not be increasing LP distribution and should instead spread out the drip we have. UNI V2 is like 55K per day in volume so I think it would be more effective to spread things around than to add more. I would divide the 300 POOL being dripped to LP 125 per day to Sushi, 125 per day to UNI, 25 per day to Sushi on Polygon, and maybe 25 per day to something else on Polygon(Kyber, Quickswap?).
While I appreciate this proposal, I do not think it is one or the other. Frankly, most people trade on Uniswap. That’s just a fact. So, we can simply incentivize both.
Could there be a SUSHI drip for LP’rs on sushiswap, or is that not a thing anymore?
(SushiSwap Core Contributor)