Uses component: CP2
Author(s): ogre44444
Beneficiary: Stellaswap
Wallet: 4g14AyHrg4MrFubtUhq6omPsN6zmtfuMHD5Hg9NUzGj97Bdd
Date proposed: 2024-04-28
The proposal can be found here
https://github.com/centrifuge/cps/pull/106
Summary
This is a proposal for CFG tokens to be used as incentives on StellaSwap’s CFG-DOT pool, in conjunction with the 1 million in DOT rewards that Stellaswap was recently awarded via Polkadot Governance. If accepted, this incentive program would run for three months, with the possibility of renewal if the Centrifuge community would like.
Check out the referendum on Stellaswap’s DOT grant here
And read the proposal in detail here
As a hypothetical and an aside from my main proposal, I’d be curious to learn the community’s level of interest (and the techncial feasibility of) the Centrifuge Dao depositing protocol owned liquidity to a CFG-DOT pool, rather than providing incentives. Generally Stellaswap is a venue for active market making, but if there’s a strong preference to go down this route instead we are open to it.
Objective
Increase liquidity of the CFG token and create awareness of Centrifuge to both EVM and Polkadot ecosystem users.
Background on Stellaswap
Stellaswap is the leading dex on Moonbeam, capturing the majority of on-chain volume. We have a Uniswap v3-style concentrated liquidity dex (running on the Algebra engine) which constitutes a unique offering on Polkadot. The capital efficiency of Stellaswap is many times higher than a standard dex, allowing much larger trades to be made on the same TVL without compromising on slippage. Our dex calculates swap fees automatically - no need for LPs to guess what fee tier to use. And we’ve got an integration with Gamma to provide automated liquidity management on many of our top pools, which if this passes could include CFG.
Note that as of this writing Gamma support is only available for one pool, but will be integrated in all of our largest pools by the time we receive our DOT incentives, in about two weeks.
The Advantages of CFG liquidity on Stellaswap
There are two angles to explore in terms of how Stellaswap incentives are uniquely positioned to promote the growth of CFG.
Stellaswap Support & Alignment with Centrifuge
A key benefit of liquidity incentives is that it’s more than just about minimizing slippage for traders. It’s about creating brand awareness. When folks are drawn to Moonbeam for the 1 million in DOT liquidity incentives, this is an opportunity for them to discover Centrifuge, and we want to help make that happen.
- A link to Centrifuge appears on CFG’s row on our Pools page. Users browsing our liquidity pools would see this and be able to click it to learn more. So much of DeFi is just about awareness and discovery, and once we’re adding large DOT (and hopefully CFG) incentives to this pool it’ll drive attention and ultimately clicks from curious users.
Budgeting and Incentive Structure
Target TVL (again, based on DOT + Stella incentives only) - $100k
Note that this level of TVL would allow for significantly less slippage than an equivalent TVL on a non-concentrated dex.
| Asset | Tokens | Period |
|---|---|---|
| DOT | 1000 | 12 Months |
| STELLA | 24556 | 12 Months |
| CFG | 4477 | 3 Months |
Implementation
When passed, tokens will be transferred to Stellaswap multisig and from there to the CFG-DOT rewarder contract
Delivery & Reporting
Stellaswap would be ready to assign incentives to this pool upon delivery of the tokens, or whenever the Centrifuge team finds it convenient based on their marketing schedule. Funds would be delivered to the Stellaswap multisig, from which they’ll be moved to the farm’s rewarder contract. Stellaswap would be responsible for reporting statistics such as TVL growth and swap volume to determine the pool’s traction, as well as click-thrus via the link on our pool.
