To add SUSHI incentives on Polygon to expand SushiSwap’s multi-chain mission.
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.
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.
SUSHI rewards activated on Polygon deployment. Polygon maybe matches the rewards.
No requirement of SUSHI rewards on Polygon.