Summary
This proposal aims to seek approval from the Astral Assembly for Dual Incentives within the following two pools on the Terra mainnet deployment of Astroport: SOLID-axlUSDC and CAPA-SOLID. Both pools meet all the criteria set by the Astroport Incentives Framework to be eligible for ASTRO incentives.
Abstract
Capapult is a revolutionary fully decentralized borrowing protocol that introduced SOLID, the first native stablecoin in the Terra 2.0 ecosystem. Our objective is to continue to contribute in fulfilling the need for a decentralized currency with low volatility. Supporting SOLID and Capapult means supporting decentralization within the Terra ecosystem and a belief in a better decentralized future.
This proposal aims to seek approval from the Astral Assembly for Dual Incentives within the following two pools on the Terra mainnet deployment of Astroport:
• SOLID-axlUSDC
• CAPA-SOLID
It is important to emphasize that both pools meet all the criteria set by the Astroport Incentive Framework:
- “The pool has been trading on Terra 2 mainnet (Phoenix network) for at least 4 weeks”
Both pools were created in March 2023, so they meet this requirement.
- “LPs in the pool should already receive token emissions (using the Astroport dual reward feature)”
Following the approval of both the Capapult Governance Proposal #2 and the ARC-70, the two pools have already been incentivized with CAPA tokens for several months.
- “Dual rewards should continue for at least 4 weeks from the moment (and in case) the Assembly passes a vote to direct ASTRO emissions to the pool”
As mentioned before, 10 million CAPA have been allocated as incentives for the two pools, specifically:
• 7 million CAPA for the SOLID-axlUSDC pool
• 3 million CAPA for the CAPA-SOLID pool
These incentives will be distributed over the course of 2 YEARS, highlighting Capapult’s goal of continuing to collaborate effectively and consistently with Astroport and its users.
- “The target ratio of fees to incentives should be 0.4, in line with those of Osmosis and Sushiswap as shown above”
In order to calculate the amount of ASTRO tokens per block that should be allocated to the two pools we made the following assumptions and observations:
• Terra block times are ~6 seconds
• The amount of ASTRO distributed per Terra block is approximately 0.05208 ASTRO
• We assumed an $ASTRO price equal to $0.050
• SOLID-axlUSDC:
- Total Volume = $144,310
- Fees Earned = $72.23
- Fees/Day = $2.33
• CAPA-SOLID:
- Total Volume = $71,228
- Fees Earned = $213.59
- Fees/Day = $6.89
• We target a 0.4 fees to emissions ratio
With these points in mind, we propose the following rewards distribution:
• SOLID-axlUSDC: 0.02 ASTRO / BLOCK
• CAPA-SOLID: 0.01 ASTRO / BLOCK
The allocation of rewards in ASTRO, in addition to those already active in CAPA, will lead to an increase in liquidity for the two pools and a rise in trading volume, ensuring an even more stable market for SOLID and attracting more users to the platform. SOLID is gaining increasing importance as the reference decentralized stablecoin in the Terra ecosystem and it is crucial to ensure that the token has sufficient liquidity, especially within the main DEX of the chain.
Furthermore, ASTRO Stakers will benefit as part of the trading fees will be redistributed to them.
We are strongly convinced that incentivizing these pools can bring significant benefits to the Astroport ecosystem and to all Terra users. We sincerely hope that the Astral Assembly can support our proposal.