[Proposal] Fix SushiSwap liquidity so BoogieBoogie can get his TRU/ETH back

The SushiSwap double rewards program for TRU/ETH was put in place on Feb 2, 2021, although due to Sushi issues, accruing did not actually start until May 20th, 2021. An airdrop made liquidity providers whole due to the bug. In the proposal, there was no end date specified for the program.

Rafael Cosman, CEO of TrustToken (makers of TrueFi), made the following statement on Discord: “The previous Sushiswap program ended and I don’t think the DAO ever made a decision that it should necessarily continue. Given how governance works, if you think it should continue, I think you can just make a proposal to refill the Sushiswap distributor! I suspect that TRU holders would be in support of some extension but continuing long-term might need a re-assessment of the value to make sure the DAO is really getting its money’s worth!” I appreciate that this is how governance works, and this may no longer be the way that the community wishes to use its incentives. However, I don’t think it’s accurate to say the previous program ended, as I can find no record of any community discussion or vote on that. I guess it’s ended because Rafael says it is?

Since the start, the Sushi rewards distributor has been refilled without issue several times, most recently on March 16, 2022. Each time, there was no mention of an end date for this program.

The MasterChefV2 contract that controls the TRU/ETH liquidity does not allow for unstaking without harvesting the rewards. This seems to be a bug that was fixed in later versions. This means that liquidity CANNOT BE REMOVED until the distributor is filled. I verified this by manually going to the contract in Etherscan, verifying my liquidity position, and attempting to harvest, which failed. Sushi support confirmed that this is not possible.

I don’t know how to find out total accrued and unclaimed TRU rewards on Sushiswap from all liquidity providers. I know that my position has accrued about 140,000 TRU as of 7/28. The last two refills of the distributor were 909,738 TRU.

Proposal:

  • Refill the distributor with 909,738 TRU (or figure out the right number)
  • Immediately stop all TRU rewards on SushiSwap ETH/TRU
  • Notify the community that Sushi liquidity is no longer incentivized

Hopefully this will prevent anyone else from having to do a community proposal to get their liquidity back.

BoogieBoogie

2 Likes

Hey @boogieboogie - good start, and appreciate you jumping in with a proposal to move things along. For better or worse, we’re really doing the DAO thing now and community involvement for stuff like this is no longer a nice to have, but a need to have.

Before we continue, I want to respond to what I see as two misunderstandings, to add color to how we got here:

1, Sushiswap incentives were not “turned off” by TrustToken/TrueFi/Rafael etc. The TRU in the pool simply ran out. The incentives were ended by virtue of being totally consumed, not by anyone’s unilateral decision.
2. Every Sushiswap refill came with a target end date - usually 90 days, as in the latest refill proposal.
3. Since those refills, TrueFi has transition to a DAO in which there is no longer a directly responsible individual who (a) has made the call and argued for this refill nor (b) who is responsible for refilling it (via Snapshot budget allocation, then actually doing the thing). This is solvable - but in the meantime, it falls to the community. That’s how we find ourselves here, discussing this proposal.

Onto the proposal itself, I’d recommend the following:

  1. There might be a better way to handle DEX liquidity support than continuing to incentive Sushiswap LPs. This is being investigated by a few people now, but they haven’t arrived at a conclusion yet. This means it’d be reasonable to simply extend the liquidity for a time, until there’s a firmer TRU liquidity plan. You can see one version (for tfUSDC) of this work happening here.
  2. I’d recommend we maintain the same incentives, but shorten the time. I propose a TRU refill of 606,492 TRU for 60d of Sushiswap pool incentives (simply 2/3 of the previous allocation, for 2/3 the time).
  3. I agree it should be clearly noted that Sushiswap liquidity should not be a given thereafter.

If we like this proposal, I’ve copy-pasted the last Sushi snapshot here, with the edits to reflect my tweaks in 1-3:

Allocate 606,492 TRU incentives for SushiSwap ETH/TRU LPs at 10,108 TRU/day for 60 days.

DeFi liquidity for TRU is crucial to minimize the token’s reliance on centralized exchanges for liquidity. Keeping the current incentives would encourage ETH/TRU liquidity providers to keep their funds in SushiSwap and allow for an on/off ramp for TRU in the DeFi ecosystem.

If approved, changes will be slated to go into effect on Wednesday, August 3rd, 2022.

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Thanks @MG-TT for the clarification. Makes sense. I guess nobody realized that Sushi rewards would still accrue after the distributor ran out, and that people who stayed in would be stuck forever. Two questions:

  1. How do we turn off the accrual in the Sushi contract so more people don’t get stuck like I am?
  2. Do we need to go through the fancy new governance vote to get this done, and if so, does somebody need to write the code to execute it?

BoogieBoogie

1 Like

@boogieboogie Thanks for post and awareness of issue. @MG-TT Thanks for your thoughtful post and reminder, that this is community based and reminding us of factual events. I agree with the revised proposal and would support moving it to a vote. I do however see that @boogieboogie did point out an issue that may need to be looked at: “This means that liquidity CANNOT BE REMOVED until the distributor is filled.” That seems to be a big issue, can we get a dev to address this with a technical solution?

2 Likes

Heyo, with your thumbs up, I’ll throw up a quick poll in the next post. In this one, I’ll respond to your Qs:

  1. Put this Q to our contacts at Sushi. We’ll be working with them to prevent this happening again.

  2. No need to write code, nor do an on-chain vote, imo, because this does not require a change to the protocol - and instead is a simple allocation of incentives from treasury. The Snapshot should be binding. I believe.

2 Likes

Now, the poll to reflect this proposal: 606,492 TRU incentives for SushiSwap ETH/TRU LPs at 10,108 TRU/day for 60 days, to go into effect in early Aug 2022.

Note the TRU will be taken from the incentive TRU allotment.

  • YES, I support allocating 606,492 TRU to Sushi ETH/TRU pool for 60d
  • NO, I do not support this incentive allocation

0 voters

1 Like

If we do this without a fix for the distributor in place, won’t we get the same issue when incentives run out?

The changes to prevent this from happening again are being worked out with the Sushi team directly!

2 Likes

I think it’s only fair and logical that the contract was written this way as it help stakers reduce the chance of losing accrued rewards based on their positions which would arise if they unstaked without harvesting. Pointing to this because of the assumption that it’s a bug. The best move here is to provide an option to unstake without harvesting and forfeit rewards accrued.

Since the contract was written in such a way that LPs cannot unstake without harvesting, then unstaking won’t be possible if the distributor is empty, this is because the rewards harvested will come from the distributor, and when it’s empty or cannot cover the rewards, invariably unstaking won’t be possible.
This is a normal operation of the contract.

Solution

  1. The best move is providing an option to unstake without harvesting, in this case, the state of the distributor (empty or full) won’t matter if the LP unstaked without harvesting.

  2. Stop the accrual of rewards when the distributor is empty. The contract should be able to allocate potential rewards to LPs based on their positions and prevent/advice other LPs from opening a position based on it’s state (empty or full).

2 Likes

We’re ready to make a post to Snapshot!

I quickly put together a post for @boogieboogie, who made the original proposal, to put forward in Snapshot here: Google Sheets link

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Thank you kindly for your help, @MG-TT ! The snapshot is now posted here. Please vote!

1 Like

Thanks for your reply. Your solution makes a ton of sense. Who should do these things? Seems like Sushi has already created a contract with the option to unstake without harvesting, but TRU/ETH doesn’t use that new contract. Also agree that the rewards should stop, although I think they should stop when the time has run out, so folks who have accrued rewards can always claim them. Maybe I’ll suggest that to the Sushi folks. In the meantime, we should be clear with anyone who LPs that they should make sure they claim frequently, and unstake when the distributor seems to be running low.

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Folks, some updates from the Sushiswap side:

  1. TRU rewards for the current Sushi LP design continue to accrue even when there is no TRU in the incentive pool, effectively creative “TRU debt” for the TRU/ETH pair. TRU in the incentive pool is only claimed at the time an LP exits the pool, which is how @boogieboogie found themselves stuck: there wasn’t enough TRU in the incentive pool to cover their earned TRU.
  2. There is indeed a new Sushi rewarder design that is available to our TRU/ETH pair.
  3. A migration to this new design is only possible if and when there is adequate TRU in the incentive pool to cover all outstanding “TRU debt” accrued in the Sushi pool to date. As of Aug 13th, that sum is 1,102,157 TRU.
  4. To date, TRU Governance has approved funding Sushi TRU incentives to the total of 606,492 TRU. We did not know about point #2 until after this refill was approved.
  5. This amount of TRU incentive funding will allow @boogieboogie and presumably some other LPs to exit the TRU/ETH pair (TRU in the incentive pool is distributed first come, first served at the moment of pool exit), but it will not be adequate (by ~500k TRU) to allow us to migrate the TRU/ETH pool to the new, “won’t get stuck again” design.

As such, because we’d like to avoid this issue coming up again later, here’s a proposed path:

  1. We refill the pool with the already-approved 606,492 TRU immediately, letting some of the LPs exit.
  2. We turn off TRU rewards for the Sushiswap TRU/ETH pool, so TRU debt does not continue to accrue while we proceed with the next steps in the solution.
  3. We put forward another governance motion to request the approximately 500k TRU needed to complete Sushi LP migration.
  4. We fund the current pool, clear the TRU incentive debt, and migrate to the upgraded Sushiswap rewarded contract.
  5. We can choose to turn TRU rewards back on for the TRU/ETH pair in the new pool.

How do we like this solution? What alternatives do you see, or would like to discuss?

Possibly the harder, more important question: Is there another DEX you’d prefer we migrate liquidity to? If so, which one? I bring this up because I know we’re considering Balancer for a tfUSDC/USDC pool, and wonder if it makes sense to consider our Sushi support, too.

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As described above, TrueFi DAO needs to allocate approximately 500k TRU (final precise number to be posted in the resulting Snapshot vote) to clear the Sushi TRU/ETH rewarder debt before we can move over to the new, “no stuck LPs” rewarder design. I propose pausing TRU rewards to the TRU/ETH Sushi pool until this issue is resolved, to prevent any further LPs getting blocked from exit.

The poll below will allow you to agree/disagree with the proposal as described above.

  • I SUPPORT (1) pausing Sushi TRU rewards, (2) refilling the Sushi pool w/ 500k more TRU and (3) migrating the TRU/ETH pool to the new rewarder
  • I DO NOT support funding the pool with any additional TRU, and accept being unable to migrate the TRU/ETH pool to the new rewarder as a consequence

0 voters

A Snapshot will follow.

1 Like

Fully support this! Thanks so much @MG-TT for fully researching and understanding the situation, and proposing a reasonable and workable solution. Really appreciate the help here.

2 Likes

We wouldn’t have gotten this far without you, @boogieboogie!

Let’s get you your funds, ser :handshake:

1 Like

Agree, thanks @MG-TT for pushing this along…I thought it was already approved and done.

I am absolutely agree with you. Hope project will be developement

1 Like

Vote snapshot your post

606,480 TRU have been sent to the Sushi distributor as decided via Snapshot

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