SIP (#008): Updated Liquidity Incentives

Summary

In previous discussions, the community had described their difficulties with the uniswap-v3 staker user experience and the impact that it has on specific users rather than a socialized pool.

These discussions led to the conclusion that we should either partner with a Uniswap-v3 LP manager, or alternatively utilize a more flexible uniswap-v2 liquidity program.

The suggested venue became Rari due to the ability to utilize an LP further to borrow capital while also earning liquidity rewards.

However in context of the recent Rari events (https://www.tally.xyz/governance/eip155:1:0x0BEF27FEB58e857046d630B2c03dFb7bae567494/proposal/54737972228715148291831450377954475770670423675395942151334883116464258243647

It is now unclear when/whether Rari will recover, allowing the proper operation of incentivized Rari pools and our planned incentive program.

There has also been significant discussion in the broader web3 community surrounding the necessity of incentives for an early project as many feel they gives stakeholders something to do, but at little benefit to the projects development itself.

With all this in mind, we would like to consider how to manage our liquidity both in the future, specifically as we prepare our community for Swivel v3 and the Swivel Safety Module.

Proposal

As a follow up to our previous discussion:
https://gov.swivel.finance/t/re-filling-uni-v3-incentives-incentive-review/105

We would like the community to consider the current options with regard to our liquidity program, especially in the interim period until the launch of the SSM and Swivel v3.

We can either continue with the current program, reduce incentives at a similar rate to our previous proposal (the current APY is excessive), or temporarily go without incentives until a further discussion demands it.

Voting

The options will be:

  • Continued Incentives (same reduction as SIP#005)
  • Further Reduced Incentives
  • Temporarily End Incentives

Should incentives continue, we will resupply the v3-staker contract with the appropriate amount of SWIV for 2 months of incentives, and will launch the new program on 6/20.