Blueberry X Sushi - Creating a New Source of Passive Income for SUSHI Holders

Summary
Voting Matter: Deploy $200k-$1M of Treasury SUSHI tokens to seed a Blueberry lending pool.
TL;DR Proposal

We propose that the Sushi DAO makes a treasury deposit of $200k-$2M of tokens on Blueberry Lend. https://app.blueberry.garden/lend (goes live next week)

This will enable the Sushi DAO treasury and all other $SUSHI holders to earn a low-risk yield by passively lending single sided tokens. Lenders will earn yield in the form of more $SUSHI and additional $bBLB tokens.

Blueberry will allow borrowers to borrow $SUSHI tokens to enter liquidity pools and yield strategies, but not to short $SUSHI. The borrowers therefore create deeper $SUSHI liquidity, another benefit for $SUSHI holders and traders.

If the protocol decides to deposit more than $1M tokens to seed the pool, Blueberry DAO will direct boosted bBLB emissions to the pool to create an additional yield for the first 2 months.

The expected net APR for $SUSHI lending will be 5-10% based on utilization, but it should almost always be much higher than AAVE or Compound markets because there is more borrow utility.

Q. Why would people borrow $SUSHI tokens on Blueberry ?

The provided tokens will be borrowed by liquidity providers who aim to beat borrowing costs by deploying the borrowed assets into yield strategies, such as the SUSHI-ETH LP.

Q. Why wouldn’t we just deploy tokens directly to the yield strategies?

We welcome community members to utilize Blueberry yield strategies. However, yield strategies can be complicated to manage and involve impermanent loss risk, which is usually not a desirable risk for treasuries to take on. Many non-treasury token holders also prefer to earn a simple passive yield on their single sided investment rather than worrying about dual price exposure, which is why we created Blueberry lending markets! Once the lending market is created, the community can participate as a lender, or as a yield strategist/borrower.

Abstract
On chain liquidity is the life blood of a DeFi project. To make your asset tradable and usable in other DeFi protocols, there needs to be strong liquidity. Liquidity is also what makes assets more resilient to the selling that occurs naturally from providing emissions incentives. Protocols need a way to generate more liquidity that does not require incentive spend.

Additionally, Sushi does have a lending market set up on Compound with $2.59M supplied currently earning 1.57% APR. On Blueberry, base APRs from borrow demand will be closer to 5% or more, and additional bBLB emissions will further boost the APR.

Blueberry is a lending market and yield aggregator combined, where assets can only be borrowed against hyper-liquid collateral, and assets can only be borrowed to deploy into our whitelisted yield strategies.

On AAVE, for example, borrowers would likely be borrowing SUSHI to sell it, creating a synthetic short position, which hurts the token. On Blueberry, no one can borrow and short. The only way you can borrow SUSHI is to use it in a whitelisted Blueberry yield strategy that involved SUSHI. For example, a usr could supply $100 USDC, borrow, $300 SUSHI, and deploy it to the $SUSHI-USDC liquidity pool to earn a yield.

Therefore, by lending to Blueberry, borrowers will actually increase SUSHI liquidity(making SUSHI a healthier market), and they will also pay SUSHI lenders passive income for lending the tokens. It’s a win-win.

By moving liquidity from other lending markets to Blueberry, the SUSHI treasury will earn a superior yield, holders will also be able to earn a superior yield, and on-chain liquidity will be increased.

Motivation
Given the purpose of Sushi’s DAO Treasury is to provide liquidity stability, depth of liquidity, and long term liquidity, this partnership helps achieve its goals. It also create a new source of passive yield for all SUSHI holders.

On the Blueberry side, we have always loved the Sushiswap product and ecosystem. We can offer a lending market for any token, so we prioritize the communities that we believe in the most that have similar DeFi oriented values. We hope to partner for the long term and have aligned communities going forward.

Specification
Sushi will deposit between $200k-$1M in order to seed a lending pool on Blueberry. Blueberry will create a lending market for SUSHI, provide $bBLB emissions to lenders, and craft yield strategies for borrowers to create additional borrow demand and resulting interest payments for SUSHI lenders.

Read more about blueberry at our medium or website: https://medium.com/@blueberryprotocol | https://blueberry.garden

For
Option 1: Vote Yes @ $200k Deposit

Blueberry DAO will create a lending pool for $SUSHI token, and Sushi DAO will deposit $200k tokens from its treasury.

Option 2: Vote Yes @ $500k Deposit

Blueberry DAO will create a lending pool for $SUSHI token, and Sushi DAO will deposit $500k tokens from its treasury.

Option 3: Vote Yes @ $1M Deposit

Blueberry DAO will create a lending pool for $SUSHI token, and Sushi DAO will deposit $1M tokens from its treasury.

If options 1-3 individually achieve 50% of the vote, Sushi DAO will deposit the respective amount to start the pool.

If none individually receive 50% of the vote, but options 1-3 collectively receive 50 or more of the vote, Sushi DAO will deposit a vote-weighted average amount of the three options.

Against
Option 4: Vote No

If Option 4 receives 50+% of the vote, we will do nothing.

2 Likes

Hey! Brent from the Blueberry team here :wave:

Excited for what Blueberry is building and eager to partner with Sushi and provide revenue to the Sushi community this lending pool :slight_smile: