Proposal : xSUSHI - Wasabi Upgrade

[0xMaki]

Summary

Currently xSUSHI holders are rewarded with SUSHI.

(Sushibar best way to see everything concerning xSUSHI from community member BoringCrypto arigato ser)

This is good with a caveat this incentives people to sell their SUSHIs earned to lock in profits…

Sushi is now hard capped and I believe personally it isn’t a good reward mechanism.

I propose that we make some changes to the way fees are accumulated and rewarded.

Here is the simple version

Apply only to the 0.05% part no changes to the 0.25% fee.

For every fees taken in SUSHI by LP pools reward them directly to xSUSHI (no change)
For every fees taken in another ERC20 market sell into yUSD (yield accruing stablecoin) or DAI.

New output for xSUSHI = SUSHI + yUSD profits
(APR at the time of writing is currently at 52% + yUSD APY on top for your stable part )

Specifications

• We would need to make change to the Smart Contract.

• Ideally incentives a pool of yUSD in the ecosystem so we can have easy access to it.
  (ETH/yUSD or yETH/yUSD + ETH/yETH, yUSD/SUSHI)

Let’s discuss !
0xMaki

Poll

• I like Wasabi ser
• No Wasabi

• yyCRV (yUSD)
• aDAI
• DAI
• USDC

[Kastrye]

Adding a form of stable income should be good, people are far less likely to panic dump if
they are holding stable coins.

Granted though, if I misunderstand and that’s not the case, please correct me. It’s getting very late over here. heh.

[magicturtle]

This adds a longterm, growing revenue stream for xsushi holders, given the supply is now capped. Will vote for!

[SushiJohnny]

Makes a lot of sense especially from an economic point of view, we don’t really want to create additional sell pressure by rewarding only Sushi for every part of the platform.

I support this idea

[simba]

Here’s my take… I think distributing trading fees to xsushi holders(Stakers) with Sushi is less attractive as it’s a volatile asset. People would not want to stake sushi to receive more Sushi.
Better way of trading fees distribution is by giving xsushi holders(Stakers) with stable coins backed by dollar(USDC/DAI). Can also be done in yusd though(interest yielding stable coin).
That’s very good marketing also and easily understood by layman. // “Stake Sushi to earn trading fees on Sushiswap in $USDC”

[SushiJohnny]

Since there are some different opinions on the different stable coin options I would propose to include a vote on which one we should use for the payout in the spirit of truly decentralized governance

[DMM]

The sell pressure of people cashing out sushi for their rewards in theory equalizes with the buying pressure from the fees generated.

I am hesitant to agree to making third party smart contracts an integral part of our rewards system, I think this is something that needs optionality. I am all for rewards to be paid in a stablecoin like dai/usdc, the only place I have hesitation is yearn vaulting. I know DeFi is yield crazy but there are risks and attack vectors when you start layering systems. We need to show our dependability to attract big money.

[vespasian]

I really like this idea.

Having xSUSHI stakers see profits in an interest accruing stablecoin is very useful and brings transparency to the SUSHI coin’s fee value.

[DMM]

I personally would sell my staked sushi if yusd rewards were integrated to the staking platform. I really do not like the idea of just chasing the highest yields and layering super nascent platforms to achieve it. I think we should be a standalone platform and have optionality of layering to earn more rewards, it has more risk no matter what you may say. Yearn vaults get interest from investing other yield paying platforms.

[simba]

Agreed with everyone who’s against y stable coins. Personally I’ll prefer most liquid stable coin that is backed by dollar.

[SushiJohnny]

@DMM we need to support the ecosystem and attract liquidity, yUSD is a great way to attract a huge amount of our target market and we can establish the go to place to exchange yUSD.

[BoringCrypto]

@0xMaki

This is good with a caveat this incentives people to sell their SUSHIs earned to lock in profits…

Currently all tokens that the 0.05% rewards come in gets sold on SushiSwap and SUSHI is bought on SushiSwap. This ‘locks up’ SUSHI and takes it out of circulation. So any sell pressure comes after it was bought. I think the real point here is that the SUSHI is sitting idle, while it could be put to work. However is can already! Because your xSUSHI is free to be invested anywhere.

This is up to the individual to decide, because they are free to move their xSUSHI (capital) anywhere they like. It makes a lot more sense to create or encourage another platform to create an option to deposit xSUSHI and lend against it.

[JiroOno]

I can see why yUSD would be appealing. Though I’m concerned with this causing artificial sell pressure. Also I think most that choose to supply SUSHI into the SushiBar are more willing to be exposed to SUSHI instead of being a LP provider for ETH/SUSHI, thus it makes more sense to me to keep the rewards in SushiBar as SUSHI.

[simba]

I don’t agree with Boring here… as I feel people who earn sushi for xsushi have to sell eventually… they’re not gonna compound or hold it as they consider it as a passive income… so from what you’re saying is just a temporary relief to the selling pressure… if we look at it long term then trading fees distributed in stable coin is definitely better.

[SushiJohnny]

As much as I like you Boring I agree with simba here. Paying rewards in the same currency as the staking uses creates a constant downwards pressure due to the fact that people have to take staking profits at some point.

[DMM]

let us choose to stake our earnings in yearn if we want too, don’t make it mandatory. I don’t want to put my earnings in yearn.

[DMM]

the DMM market is way bigger than than the yusd market. We dwarf their size, lets not alienate a ton of people to attract a few.

[simba]

Letting anyone choose doesn’t make sense to be fair… better would be to just distribute in dollar backed stable coin… and it’s upto the user if they wanna convert to interest yielding stable coin if they want. There’s another advantage in that case…
Like if trading fees is distributed in $dai and user wants to to swap it for $yusd… it’ll be additional revenue for us

[BoringCrypto]

Well, currently it attracts about 20% of all SUSHI, taking it out of circulation. If people leave, APR goes up, attracting new people, ensuring always a certain % stays locked up there.

While currently there isn’t yet a way to invest your xSUSHI. Once you can put your xSUSHI to work, you can have your cake and eat it… You stake your SUSHI, get rewards in SUSHI (and this creates BUY pressure for SUSHI) and you can put the full value to work as xSUSHI in ANY way you like, borrow some stablecoin, put it in yUSD if you like. That way, not only your small % rewards sit in yUSD, but a large share of your principle.

[0xMaki]

Same can happen with xSUSHI receiving income in both SUSHI + Stablecoins ?

xSUSHI can be put to work after even if the “base layer” receive some income in stablecoin