Disclaimer – I am a member of the TFL team
The Terra community has been focusing on 3 things this year:
1. Increasing UST presence across various L1s and L2s - the community has passed Liquidity Mining Proposal #3 by @lejimmy and Reasonable Strats Part Five to bootstrap UST liquidity by incentivizing UST pools
2. Introduce new use cases to UST - the community has passed UST Goes Interchain: Degen Strats Part Three and UST Goes Interchain: Degen Strats Part Four to encourage adoption of UST across DAOs and new, interesting projects
3. Increasing capital efficiency of Terra’s cross-chain efforts - most recently, the community has passed UST Goes Interchain: the 4pool and redacted cartel to collaborate with partners
In the last 1 year of cross-chain collaboration, Terra has formed great partnerships with projects that share the goal of spreading decentralized money in decentralized finance. It makes a lot of sense to form strategic alliances with partners that share the community’s goals, but also do it in a smart way with elements of objectivity baked in, so as to be fair to everyone.
Refreshing of incentives
In this proposal, Terra community would like to refresh incentives for partners that share the vision and where UST has been capital efficient.
Terra community has previously incentivized various Orca pools with $510k worth of LUNA rewards - the rewards were partially matched by Orca.
Orca pools have been one of the more capital efficient pools on Solana DEXs, as $1 of incentives brought $7 of UST liquidity(!!). Orca is also launching their v2 with exciting new features, including Uniswap v3-style concentrated liquidity and triple incentives support.
Given the pools’ capital efficiencies, and strong support from Orca to UST pools in terms of co-incentives and marketing support, it would be nice to refresh Orca’s incentives.
The $432k of incentives across 3 months will be split amongst the following pools:
- SOL/UST: $48k/month, the pool will be at least matched by Orca’s native $ORCA token
- mSOL/UST: $12k/month, the pool will be co-incentivized by Marinade Finance with $MNDE token and Orca’s native $ORCA token
- stSOL/UST: $12k/month, the pool will be co-incentivized by Lido with $LDO token and Orca’s native $ORCA token
- wLUNA/UST: $24k/month, the pool will be at least matched by Orca’s native $ORCA token
- UST/USDC: $48k/month, the pool will be at least matched by Orca’s native $ORCA token
It’s worth noting that Orca would be increasing their emission on their side for UST pools (to at least match Terra’s incentives) as well!
Solend was Terra community’s first partner in Solana for liquidity incentives.
Given the following reasons, refreshing incentives are worthy:
- Solend was Terra’s first gateway to getting UST on Solana
- Solend is the lending protocol on Solana
- Incentives on Solend have been capital efficient - $1 of incentives brought $100 of UST liquidity(!!!)
- Solend has also shown the Terra community a lot of love - they will be increasing multiplier to UST pool from 1x to 4x (which brings it to equal emission with USDT), with 3x matching from Terra’s side
Currently, Solend’s emission schedule is 0.1585 $SLND/slot, where 1 slot = 500ms. This brings daily emission to 0.1585*(2460601000/500) = 27,389 $SLND = $57k equivalent. The new multiplier would allocate $57k(4/28)=$8,217 daily to UST pools. Terra community can match it by allocating $8,217/4*3=$6,162 daily to UST pools.
To match multiplier to UST pool, allocation of $550k across 3 months to the pool is recommended.
(New) C98 Solend Isolated UST Pool (Solana)
C98 is an all-in-one DeFi Platform that aims to become a gateway bridging TradFi users to DeFi services on multiple blockchains. It has a full suite of products, including Coin98 Wallet, Coin98 Exchange, and Space Gate (cross-chain bridge). C98 recently created an isolated lending market on Solend.
The proposal seeks to allocate $30k in UST over 3 months - in return, C98 would be matching 2x of Terra’s contribution in C98 token to incentivize UST lending pool, and potentially more as demand for UST borrows/loans grow.
(New) FantomMaker (Fantom)
FantomMaker is a launchpad on the Fantom blockchain, and currently boasts ~12k whitelisted users. As a decentralized launchpad, FantomMaker would like to have UST, a decentralized stablecoin, as the go-to stable currency on their platform.
The proposal seeks to allocate $500k for UST LP farms - the allocation is intended for 10 Launchpad projects over the course of 1 year (i.e. $50k/project). For better alignment of interests, liquidity incentives will only be allocated to launchpad projects that allocate highest emission to UST pools, and integrate UST in their platforms.
FantomMaker will also be accepting UST as purchasing currency for launchpad (which currently only accepts FTM), presenting new use case for UST.
Allocate ~$1.5m for liquidity incentives across Orca ($432k), Solend ($550k), C98 ($30k), FantomMaker ($500k).