Summary:
The pSTAKE team proposes to incentivise the following liquidity pools from the Incentivisation and Community Development Fund to further bootstrap liquidity, with the objective to facilitate the onboarding of investors of various sizes into the liquid staking ecosystem.
| Pool | DEX | Incentives | Duration | Estimated APR |
|---|---|---|---|---|
| PSTAKE/OSMO | Osmosis | 500.000 PSTAKE | 3 months (90 epochs) | 52.3% |
| stkATOM/ETH | Sushiswap | 250.000 PSTAKE | 1 month | 9.8% |
Introduction & Rationale:
Since the PSTAKE token went live at the end of February 2022, there has been tremendous adoption so far with a user base of over 20.000 PSTAKE holders. As the team continues to work on adding more liquid staking solutions for various assets into the pSTAKE application (first few expected in Q2), it will be crucial to continue to onboard new stakers and users into the pSTAKE ecosystem, while ensuring utility for the already available liquid staked assets.
From past experiences, we’ve learnt that bootstrapping important liquidity pools contributes to long-term growth and overall stability of the ecosystem, hence we propose to incentivise the pools below with a total of 750.000 PSTAKE tokens from the Incentivisation and Community Development Fund.
PSTAKE/OSMO:
| Pool | DEX | Incentives | Duration | Estimated APR |
|---|---|---|---|---|
| PSTAKE/OSMO | Osmosis | 500.000 PSTAKE | 3 months (90 epochs) | 52.3% * |
While the current liquidity in this pool allows traders of most sizes to swap, slippage occurs on larger trades. Increasing the liquidity in this pool will ensure low slippage transactions for traders of all sizes, making it more attractive for all types of buyers in the market.
- Estimates based on pool size and PSTAKE token price at the time of writing this post. Note that an Osmosis Governance proposal will be posted as well to request for matching OSMO incentives. If approved, the estimated APR could double.
stkATOM/ETH:
| Pool | DEX | Incentives | Duration | Estimated APR |
|---|---|---|---|---|
| stkATOM/ETH | Sushiswap | 250.000 PSTAKE | 1 month | 9.8% * |
With a total of almost 1.000.000 ATOM staked via the pSTAKE protocol, stkATOM plays an important role in the growth of pSTAKE. In order to provide utility for stkATOM holders and fully reap the benefits of using pSTAKE, the team has been working on integrating with the Anchor Protocol, which is the largest and most actively used borrowing/lending protocol in DeFi. Integration of stkATOM (bATOM) into the Anchor protocol will allow users to borrow UST against their stkATOM. The integration is ready and is awaiting acceptance via this Anchor governance proposal.
Once accepted, demand for stkATOM is expected to spike, and it will be critical to have deep liquidity pools in order to enable people to buy stkATOM directly from a decentralised exchange (in case they prefer not to go through the liquid staking process themselves).
Besides, the Anchor protocol will also be using this pool for liquidations of staking rewards, hence deep liquidity is a must to guarantee market efficiency.
If accepted, Liquidity Providers of this pool who stake their LP tokens with pSTAKE will be earning three types of rewards: 1. ATOM staking rewards, 2. Pool fees (generated through stkATOM/ETH swaps), and 3. pSTAKE incentives.
- Estimates based on pool size and PSTAKE token price at the time of writing this post.
Mechanics:
Upon acceptance of the proposal, 750.000 PSTAKE tokens will be transferred from the Incentivisation and Community Development Fund wallet to the following safe address: 0xf90C522d13641681A8f9f550f511D6bfBE363a69
The multi-sig holders of the wallet are
- Tushar Aggarwal - Founder and CEO
- Mikhil Pandey - Product Lead
- Pratyaksh Inani - Research Lead
The proposal is live on Snapshot and PSTAKE holders can vote on it here: Snapshot