CUIP-002 - RBW/wETH LP Staking Proposal [Pass]

Abstract

With this proposal we intend to setup a reward program for players providing long-term liquidity to the RBW/wETH trading pair on Balancer (Polygon).

Motivation

It’s vital to our economic growth that we have enough liquidity to allow players to enter and exit with minimal slippage. Increasing liquidity reduces slippage and decreases the barrier to trading. While this can be a double edged sword we intend to leverage a locking mechanism + leaderboard to align incentives with those willing to take on higher risk of impermanent loss.

Details

RBW/wETH LP Program:

On April 28th, 2022 we will remove the RBW/USDC pool and create a new pool RBW/wETH on Balancer.

  1. We will initially seed this pool with $10M (RBW/wETH) and plan to keep this liquidity as a baseline for the pool. Please note: We will not stake these treasury owned LP tokens.
  2. We will then open up LP staking on https://cryptounicorns.vault.inc/

LP staking will work similarly to RBW staking. Players will have the option of a 1-12 month lockup. The longer you are willing to time lock the higher the APY. Our target is $20M in liquidity (including the $10M in baseline) which will yield ~ 2%-80% APY depending on the length of time staked.

Initially these APYs will be as high as 800% to incentivize early LPs and to help mitigate the risk of impermanent loss. If you are unfamiliar with impermanent loss please review this article . It is extremely important to grasp this concept prior to LP’ing!!

In addition, to the base RBW rewards above we will launch an LP staking leaderboard!

The structure is simple for the first year. Each month we will take a snapshot. The monthly rewards are as follows:

LP UNIM_RBW Rewards

The Year 1 staking leaderboard will conclude with a final snapshot on 4/28/2023. The rewards are as follows:

Proposal Cost

There is no direct cost to the CU DAO as Vault, Inc. already has this functionality in place. Please note: We will submit a separate Ecosystem Fund Grant proposal in the future for the Vault, Inc team given their incredible contributions to our ecosystem.

Conclusion

We ask that the community vote in support of this proposal when we activate the vote on April 20th, 2022. This will allow us to be set up and ready to go on April 28th!

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