SCCP 35: Reduce Rewards On Curve to 24,000 SNX Source

AuthorKaleb Keny
Discussions-Tohttps://discord.gg/B3PtpY
StatusImplemented
Created2020-07-18

Simple Summary

Decrease SNX incentives on the sUSD Curve pool to 24,000 SNX per week

Abstract

32,000 SNX per week from inflation rewards are currently paid to the sUSD pool on curve which incentivizes liquidity provision to the sUSD/ DAI-USDC-USDT pool.

Motivation

The recent premium on the sUSD peg on Curve calls for taking action as traders feel a disincentive to pay it to buy synths. Despite the recent price run up of SNX, accompanied usually by an increases in supply of synths, the premium has remained, possibly due to two main contributors: 1) Farming purposes (CRV, foundation led incentives…) 2) Increase in exchange activity

It should be mentioned that although many have been asking for a c-ratio change to stabilize the peg, the discussion under this research post, outlines the pros and cons of doing this. The main argument for reducing incentives ahead of any c-ratio cut is to set SNX on a more sustainable long-term footing and decrease the leakage of value from minters, to the minimum required that achieves a stable peg.

Copyright and related rights waived via CC0.