On January 19th, 2021, a proposal was made to migrate the TRU/ETH liquidity provider incentives from Uniswap to Sushiswap, with the logic that the migration would engender community cross-promotion to reach new users, and also offer double rewards: SUSHI & TRU.
The proposal passed a Snapshot vote on February 2nd, 2021, with a reduction in the outgoing TRU rewards: Sushiswap LPs to receive 10,108 TRU per day (20% of Uniswap incentives).
With a “double rewards” feature to ship with Sushiswap V2, it was believed the combination of SUSHI & TRU rewards would drive pool returns to an attractive range, as high as +100% APY.
Sushiswap incentives were designed to launch at the conclusion of the Uniswap TRU/ETH farm, which ended March 22nd, 2021. Though some Uniswap LPs migrated their funds starting February 5th, after the vote was passed, the majority of LP activity occurred in March onwards.
Unfortunately, Sushiswap V2’s launch (and by extension, double rewards functionality) was delayed to accommodate audits and test deployments, so TRU rewards were never distributed to Sushiswap LPs.*
Sushiswap LPs did, however, receive SUSHI rewards via Onsen as well as trading fees.
*TRU/ETH Onsen rewards also recently ran out, though this was explained to have been a V1 > V2 migration mistake and are being restored.
This proposal seeks to distribute TRU intended to be used for Sushiswap LP rewards retroactively to LPs who participated in the Sushiswap pool between March 22nd and May 20th, 2021 - the end of Uniswap incentives, and the launch of TrueFi V3, respectively.
The intention is to appropriately compensate Sushiswap LPs commensurate with the expectations set by the TrueFi & Sushiswap teams during the original proposal.
- Sushiswap LPs did receive SUSHI rewards and fees
- Sushiswap LPs did not earn TRU rewards (this is why we’re proposing this!)
- 22% ROI for users in Sushi LP from snapshot on 2/5 to 5/20 launch
- ROIs differ for users who entered and exited the pool at different dates, of course
The number of impacted LPs: 33
- Note: Largest LP was company treasury; any TRU farmed by the treasury would have been burned, so this LP can be excluded
- Source: Dune Analytics
If farm had run at the expected rate of 10,108 TRU per day from 3/22/21 to 5/20/21, LPs would have received 172k TRU (or ~$60k USD at current $0.33 TRU price)
The most generous argument: Considering the total amount of USD, at ~$60k, is relatively small, the most generous consideration is to distribute the reward to Sushiswap LPs in full, many who entered the pool in anticipation of TRU rewards. These community participants do a service for TrueFi and it can be argued they’re worth taking care of. The most generous idea is to grant LPs 100% of the allocated TRU from the date the snapshot was passed.
Conservative arguments: A high APY farm launching would have attracted more capital to the pool, diluting the LPs. It can be argued TrueFi should only allocate 75-50% of the allotted incentives to reflect this theoretical inflow.
Argument against disbursement proposal: In fact, most LPs made a decent return on the pool regardless of double rewards not being enacted: approximately 20% ROI.
Let’s start a discussion about (a) whether these LPs should be retroactively rewarded for their service to TRU liquidity and (b) to what extent (ie 100%, 75% or “most generous,” “starting at X date, not Y date”)
- YES, distribute 100% of the estimated rewards (172k TRU) to the 33 affected Sushi LPs
- NO, do NOT distribute 100% of the TRU rewards to the 33 affected LPs