oSUSHI and Trident Incentive Alignment

Context

At the moment there is no way to align Sushi LPs (especially upcoming Trident LPs) with the protocol over a long time horizon. There was a proposal for oSUSHI a while ago that can help but it hasn’t been implemented yet.

History

A couple of weeks ago, the Sushi team revealed the code for Trident, Sushiswap’s upcoming AMM. Looking at the code, Trident can offer SUSHI incentives for LPing in different pool types, similar to the incentives offered now for Sushiswap pairs. This means that Trident incentives can still put selling pressure on SUSHI.

Solution

Build a layer on top of Trident that does two things: 1) Create and deploy oSUSHI where xSUSHI holders can lock their tokens anywhere between 1 week and 4 years, 2) Allow Trident LPs to deploy capital in pools and harvest SUSHI rewards which are then automatically staked in xSUSHI that’s then locked in oSUSHI.

This layer is made of multiple smart contracts, each one connected to a specific Trident pool. When people LP, the funds go through one of these contracts and then into Trident. Every time someone enters or exits Trident through one of these contracts, they automatically harvest SUSHI rewards for everyone else (including the address that enters or exits) and lock them in xSUSHI. The address that enters or exits will have their xSUSHI locked in oSUSHI for 6 months starting on the block when they entered/exited. oSUSHI stakers are allowed to get back their xSUSHI before their timelock expires by incurring a 50% penalty. The penalty is sent back to the SushiBar where xSUSHI holders staked their SUSHI.

Benefits

  • Align Trident LPs with Sushi for the long term
  • Further bootstrap Trident adoption by compounding SUSHI rewards
  • Simplify Trident UX in the process of aligning incentives

Questions

  • Should we only focus on building the Trident aggregator and not deploy oSUSHI for now?

About

I reached out and discussed with the Sushi team prior to posting this proposal and mentioned that I would like to build this oSUSHI and Trident aggregator.

I would like to launch this aggregator as a separate protocol called Temple and I’m currently looking for at least two other community members who’d like to contribute on frontend and community building/comms.

Temple will have its own fee earning token and will give out a portion of it in an airdrop to current xSUSHI holders at the moment of the launch. Temple won’t have deposit or withdrawal fees but only a low performance fee for SUSHI rewards. Fees accrue in the Temple protocol and can then be used to generate more revenue (e.g lending xSUSHI on Aave).

Authors

Dexter

4 Likes

Cool product !

So if I understand well Temple would be kinda like Convex but dedicated to Sushi and Trident ?
Wrapping SUSHI rewards into oSUSHI to increase users yield ?

1 Like

Agreed, seems to be similar to Convex. I like the idea of its “own fee earning token.” In terms of Governance how will that be controlled - via Sushi or a separate forum and vote?

Yup it’s like Convex but we instead lock SUSHI to align people long term with the protocol.

Governance will be with the Temple token but most of it will be earned by Trident users so basically the Sushi community will be in charge.

2 Likes

Hey Dexter just wanted to invite you onto the sushi forum happening in ~1 hour in the sushi discord. It’s an open forum to discuss past week’s news&proposals with the sushi community. If you can’t make it no worries, short notice on the invitation

1 Like

Agree. sushi has many products especially after trident; and some form of consolidation for sushi holder to benefit from these utility is needed. this project has the potential to bring fundamental value to xsushi stakers; as well as drawing attention to the possibility sushi ecosystem.

agree :grinning: :smiley: :smiley: :smiley:Great proposal, hope to adopt

Echoing that, very supportive for a Temple development!