Repurpose Saddle tBTC Pool Liquidity Incentives and Move Incentives to T

Intro

Currently, the Keep Network treasury has a budget to provide liquidity incentives until the end of April 2022. This means the DAO has until then to migrate incentives to DAO owned and issued in T. This proposal is the first step in that process.

Until now LPs in the tBTCv2 pool on Saddle could stake their LP position either in the Keep staking contract receiving KEEP rewards or in the Saddle staking contract receiving SDL rewards. However, a new contract is being deployed that allows users to earn incentives in multiple tokens.

TLDR

  • There is a new rewards contract that allows Saddle tBTC v2 metapool LPs to earn reward tokens from Threshold and Saddle instead of picking only one
  • Move Threshold Liquidity incentives to the new contract so users can earn double rewards. This means LP tokens in the current Keep rewards contract need to migrate
  • Move liquidity incentives from KEEP to T with top ups executed by the DAO
  • Reduce the current reward allocation to match Saddle and repurpose the savings

Features

  • Aligning KEEP rewards matching SDL rewards on the Saddle Stableswap pool, which would mean providing 32k KEEP or roughly 153k T per week,
  • Rewards will be given out in T tokens, which avoids changing reward tokens after April.
  • Stakers in the Keep staking contracts have to move over to Saddle staking contracts to be able to get both reward tokens.
  • Transferring the excessive incentives from the Saddle Stableswap pool to the Threshold Council to better use, e.g. for :
    • Supporting the tBTC v2 launch
    • Acquiring POL, Protocol Owned Liquidity, and diversifying the Treasury
    • Bribing vote weight
    • Swapping governance tokens.
  • Once the Threshold DAO governance contracts have been deployed the remaining incentives would be transferred to the DAO.
  • The council should upgrade the KEEP to T.

Benefits

  • tBTC pool on Saddle are already being incentivized with SDL tokens, matching KEEP incentives to the same amount would allow us repurposing 1.3M KEEP ($850k - $1M) for better use, e.g. :
    • ​​conserving the incentives until v2 minting is ready to go live,
    • acquiring voting power through governance token swaps,
    • incentivizing tBTC gauge voting through bribes,
    • incentivizing tBTCv1 to v2 migration,
    • acquiring tBTC to diversify DAO treasury while capturing part of the incentives.

Schedule

The proposed re-alignment of rewards on the Saddle Stableswap pool schedule is :

Week 0: The week this proposal passes (if so) nothing changes and 250k KEEP is still allocated to the current rewards contract on Friday. There will be an announcement and all stakers have to redeploy staking into Saddle’s staking contract.
Week 1: 153k T to new double rewards contract.

2 Likes

Looks good to me.

19% APR on a pool with pegged assets is huge.

1 Like

Sounds like an excellent re-allocation of resources to meet current conditions and strategy. A great example of what this new paradigm allows; glad we are finding creative ways to experiment and execute on it.

Thanks, @Eastban!

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