Proposal: Add SUSHI incentives on Polygon market

[capncook]

Summary

To add SUSHI incentives on Polygon to expand SushiSwap’s multi-chain mission.

Abstract

The Polygon ecosystem is a suite of Ethereum scaling solutions with Plasma and PoS chain live and running. SushiSwap is also deployed on the PoS chain but volumes and liquidity are minimal due to absence of any incentives (from both parties). Polygon has DEXes but depth of blue-chip pairs suffers, resulting in price slippage on a $100k transaction. SushiSwap, with its brand image and loyal following should capitalise on this gap. For eg. alloc points can be allocated for the top 5 pairs like ETH-wBTC, ETH-USDC, ETH-MATIC, ETH-DAI and wBTC-USDC. In addition to pairs which community proposes.

Background

The purpose of this partnership is to expedite SushiSwap’s multi-chain vision and create new opportunities for Liquidity providers to generate revenue. Going this route, I believe shouldn’t hurt liquidity on L1 Sushiswap primarily due to 2 reasons -
AAVE recently launched the LM campaign on Polygon and saw TVL soar quickly, but this did not come at a cost to Aave Ethereum mainnet. In fact, they saw an overall 25%+ increase in no. of unique users on Aave. At the time of writing, AAVE had over 6000 active users on Aave Polygon and close to 1.7 B in liquidity (10% of overall market) in less than 3 weeks.
We know there are two categories of LPs/traders - one are the whales and second the retail. Whales for a multitude of reasons might not move funds over to another chain but the retail will happily cross networks to capture the early APYs/fees. This will generate more transaction volume for SushiSwap and hence more revenue for SUSHI. This where SushiSwap can capture most value by including traders that are priced out on Eth mainnet. Just to give a perspective - 24H transactions on QuickSwap is 232,737 compared to 194,533 on Uniswap.

For

SUSHI rewards activated on Polygon deployment. Polygon maybe matches the rewards.

Against

No requirement of SUSHI rewards on Polygon.

• Yes
• No

[hhk]

I think matic rewards might be turned on soon, as aave or curve did.
Won’t be surprised if it happens in the next few weeks.

And I would much prefer matic rewards than sushis, so ethereum yield is not affected.

[SuperLuminal]

This is being done in the usual chaotic and confusing way.

There is no announcement at all.
I learned about this from a single late night post by Omakase and voted here:
https://snapshot.org/#/sushi/proposal/QmSB39Li1wiNBQuCN2fJkndkoeBomVbp4qY84m56BpDX6Y

Today we get a post by Sushi_fren that links to here, but there is no apparent way to vote on it.

This is a flat out awful way to run community government.
There needs to be much better communication about these proposals, when the comment period ends, and where you vote.

There is not even anything about it in the governance channel of the Discord Server.

[orionmuir]

The team is creating lightning fast responses to multiple rapidly changing ecosystems. This vote will get us on one of the leading layer two solutions with subsidized pairs from polygon. Yes DAOs are disorganized. Yes DAO’s are dynamic in how they are adapting and evolving. If you can point me and the sushi team to a DAO that is doing a better job with concrete suggestions on how to mimic them, then please do tell.

Personally, despite my entirely too large sushi bags getting decimated I am so satisfied in this team’s level of innovation and business development.

[0xMaki]

I have confirmation that the Polygon team is ready to match up to 15m$ worth of MATIC tokens if we are able to match the rewards in Sushi, I think we should simply leverage some of the sleeping treasury fund to bootstrap a highly liquid L2 / Sidechain Sushiswap there has been tremendous traction from DeFi Bluechips and friends Aave - Curve.

We would proceed to an official snapshot in the next 24-48h if this gets enough traction among community members since it is time sensitive and already ready to ship.

Major pairs would be initially rewarded with a potential opening of Onsen if we see demand from team launching tokens on Polygon.

• Use treasury to match 15m$ incentives running on 3mo.
• Divert Emissions
• Negative ser, stay on ETH only

[hhk]

This looks better, thanks for clarifying the situation ! strong yes

[magicturtle]

Hugely bullish on this, polygon has been extremely smooth in my experience. Demand is there, we just need the liquidity to sit on sushiswap and the xSushi fee ouroboros begins. @capncook we’ll definitely be bringing this up at the upcoming sushi forum!(hosted in the discord Thursday 9pm UTC )

@0xMaki I think this is an appropriate way to leverage the treasury, but I’m interested to hear other’s opinions as well.

obligatory meme :^)

[fugu]

@orionmuir

If you can point me and the sushi team to a DAO that is doing a better job with concrete suggestions on how to mimic them, then please do tell.

MakerDAO, ser. Nice TVL too

Once the culture takes it’s tough to change though.

[sushi_fren]

i think this is a great idea without sacrificing Ethereum LP incentives. Although we spend our own treasury money, this much amount will be a good investment helping the Sushi ecosystem to expand to the promising chain. I voted YES.
i agree that it’s time sensitive and we should move asap. Hope the snapshot duration is shortened.

[SuperLuminal]

I voted to support 0xMaki’s suggestion, but still think there are improvements that can be made to the governance process.

Starting with the fact that everyone who moved their xSushi into Bento Box will be disenfranchised on this vote unless that problem is corrected before the snapshot is taken.

[orionmuir]

Agreed to both points. Maybe someone on the team could make a sushi branding SIMP / Governance / Forum Process template or wiki. We are shaping how DAOs will work and be perceived. When disorganization is inherent clear agreements are of the utmost importance. It just can be tricky with out defining everything because its hard to know where to draw the line between creative discretion, a voting matter or a matter requiring community brainstorming.

Personally, like Andre said I think it works best with a benevolent dictator making most of the minor decisions.

Another question is should we have delegates or a ruling council for minor decisions or to be able to rush something to vote. I like this idea too. On a recent bankless podcast on governance they said it would be great if we could have a check and balances system kind of like the united states judical, executive and legislative branches.

[Tangle]

Liquidity, liquidity, liquidity. It’s the name of the game here. This proposal will help attract liquidity and volume. It may cause some sell pressure, but I think the benefits outweigh the negatives in the long run. Good move for retail users. Also may help with education of the ecosystem, so smaller holders can move assets around and understand how products work.

[alb]

Given the ongoing collaboration with the yearn.fi and pickle.finance team, wouldn’t it be massive if a joint effort is put in place in order to ramp up farming and strategies on Polygon?

Aave and Curve have already captured a lot of value and for the many who are priced out on L1, L2 can be a real promised land. As long as the incentives are not outpacing L1 rewards it will be unlikely to see liquidity migrating from L1 to L2. On the contrary a lot of retail investors are going to finally have access to L1 level profits but with a lower entry barrier.

These synergies are going to feed on one another and make the space even stronger.

[katsuSando]

One thing to note is that Aave and curve incentives are still active (you can see them on their websites).

They aren’t as great as they once were but something to think about when looking at whether the sushi incentives will be strong enough to draw away capital from those pools.

Currently looping back Matic and leveraging to the tits on Aave gets you about 19% APY and decreasing slowly.

Its no 200% APY but its honest work.

[0xMaki]

Agreed, only issue with changing who can vote and the weights is that it will nuke the current snapshot (erase everything in it) the next proposals to past are going to be the last ones where only xSushi and ETH/SUSHI SLP are supported afterwards we will make sure that more holders weather in Aave - Kashi - Cream - Maker - etc. and making it more flexible.

[SuperLuminal]

Seems like it’s a done deal anyway.

It would have passed no matter what format the vote was in.

My last word on this is a request that you provide more information to the Discord members. We are your loyal followers, not Twitter.