Prop 543: Signaling Proposal for stIBCX/OSMO (#1039) Incentivised Pool

By voting YES on this proposal, OSMO stakers voice their support for adding the stIBCX/OSMO pool #1039 to the set of pools that continuously receive OSMO incentives.

By voting NO on this proposal, OSMO stakers voice their dissent in adding the stIBCX/OSMO pool #1039 to the set of pools that continuously receive OSMO incentives.

Summary

stIBCX was launched just a few days ago. It's an index token composed of a diversified basket of Stride liquid staked Cosmos tokens sourced from the Osmosis DEX. stIBCX is issued on the Osmosis blockchain, and its governance token is ION. This proposal aims to support the roll-out of stIBCX by adding the stIBCX/OSMO pool (#1039) to the minor incentive category.

About IBCX

IBCX is a Cosmos index token that's designed to benchmark the leading Cosmos tokens' performances. It aims to achieve this by procuring and maintaining those tokens as its collateral. IBCX price is dynamically calculated based on the spot prices of its selected components, or the collateralized Cosmos tokens. The weight % of each token is determined and periodically rebalanced based on the ION DAO's governance voting results. ION is a native token of Osmosis, and ION DAO plans to fully utilize the liquidity of Cosmos's #1 AMM to ensure the successful operation of IBCX. Osmosis's ION DAO governs IBCX, and it aims to provide new opportunities to the Cosmos Ecosystem.

About stIBCX

So what's the point of stIBCX? Primarily, stIBCX offers convenience. By simply holding stIBCX, users get exposure to most significant Cosmos tokens. The tokens underlying stIBCX do not forfeit their staking rewards, as the majority of them are liquid staked. The tokens underlying stIBCX are automatically rebalanced periodically, to reflect the changing Cosmos landscape. And stIBCX is of course completely liquid, so users can trade it whenever they want. So it's a great token for casual or beginner Cosmonauts to hold. Beyond convenience, stIBCX could become a very popular collateral token. The great thing about stIBCX as collateral is that it contains many large and small tokens, but they all have the same liquidation point. This can be a life-saver! For example, starting with $100, a user could buy $98 worth of ATOM and $2 of Token X, and then set up one leverage position using each token. If Token X suddenly goes to zero, then the Token X leverage position will be liquidated. Now let's take a few steps back. What if instead the user bought an index token composed of 98% ATOM and 2% Token X, and then set up a single leverage position using the index token. Then if Token X suddenly went to zero the leverage position would be intact, since the collateral would only be down 2%. This is the main benefit of using an index token as collateral as opposed to separate tokens. Given the strengths of stIBCX, it could easily become a standard collateral token across Cosmos DeFi leverage applications. So if stIBCX is such a great product, how does it benefit Osmosis? Mainly, stIBCX creates trade volume for the Osmosis DEX, because all tokens in the stIBCX basket are sourced from the DEX. Whenever stIBCX is minted or rebalanced, it creates trade volume. So the bigger stIBCX becomes and the more integrations it gains, the more trade volume generated on Osmosis DEX. And the fact that stIBCX is issued on the Osmosis blockchain furthers the status of Osmosis as the hub of Cosmos DeFi. Imagine a future where stIBCX replaces stATOM as the most common Cosmos collateral, used in leverage applications across the Cosmos. Such a future would be very positive for Osmosis.

Details

stIBCX is the latest token in the Osmosis family, the others being OSMO, ION, and IBCX. All these tokens are native to the Osmosis blockchain, and as such Osmosis governance has an interest in ensuring they all have adequate trading liquidity. So in order to ensure a smooth roll-out for stIBCX, it would make sense to include the stIBCX/OSMO pool in the minor incentives category. This would allow the pool to receive OSMO incentives proportional to the amount of trade volume it generates. But Osmosis governance won't be the only DAO incentivizing the stIBCX pool. The Stride DAO has indicated its intention to add STRD incentives to this pool. The stIBCX pool is being incentivized with 300 STRD per day, in order to bootstrap liquidity.

CommonWealth Link: https://gov.osmosis.zone/discussion/11725-osmo-incentives-and-superfluid-for-stibcx-pool