Prop 109: New Evmos Liquidity Incentive and SpaceFi Whole Launching
This proposal is to introduce Evmos Liquidity Incentive to spacefi.io and help Evmos liquidity and ecosystem to grow further through the launch of SpaceFi’s entire products suite (DEX+NFT+Spacebase+Launchpad) as well as the SPACE token.
Final Proposal: [Pre-Vote] New Evmos Liquidity Incentive and SpaceFi whole launching
Full Discussion: [IDEATION] New Evmos Liquidity Incentive and SpaceFi whole launching
Abstract
Since the previous 2M EVMOS Liquidity Incentive was first launched on Diffusion, Evmos native liquidity and ecosystem has shown encouraging growth. At the same time, we are also experiencing some difficulties. The TVL on Diffusion has grown to a height of $7.4M and since Evmos price fell, the TVL has gone down to $2.5M (2023.01.18). During the process, we found 3 issues: first, multiple bridges and liquidity fragmentation; second, mercenary liquidity and reward dumping; and third, the lack of the ecosystem building and Evmos use cases, damaging Evmos’ value. The EVMOS Incentive on Diffusion ended on 2023.01.19.
Strategy
We're trying some new measures to improve Evmos native liquidity and ecosystem.
1. Concentrated Liquidity
Although Evmos has $2.5M in native liquidity, it is mainly split into 13 trading pairs. We recommend temporarily focusing Evmos Incentive on a single bridge and major trading pairs (ATOM, USDC, wETH, etc.), in order to concentrate the limited liquidity. According to community's feedbacks, we plan to start from Axelar as the single bridge to concentrate liquidity first. More bridges and assets such as grav.USDT / ceUSDC / stEVMOS (stride) can be added after the effective growth of liquidity.
2. LP Bonding
To incentivize long-term liquidity providers and to avoid the adverse effects of mercenary liquidity, SpaceFi Farm supports LP Bonding, including no bonding, 7 days unbonding and 14 days unbonding. The longer the LP is locked in the farm, the higher the APR will be.
3. Ecosystem Building
Evmos Liquidity Incentive is a short-term booster. And the thriving ecosystem projects are the long-term value. SpaceFi has been actively helping new projects get started in Evmos through Incubation and Launchpad Program. We've incubated Soul Network, a cross-chain DID network Cosmos & Ethereum, and also the First Place Winner in the Web3 track of Evmos Hackathon.
Action Plan
According to the community's feedbacks, we plan to apply for 1M EVMOS as the liquidity incentive to start, in a program lasting 90 days, and expect to bring $4-$8M native liquidity with ARP 37% (no bonding) - 73% (14 days unbonding), similar to it on Osmosis. The above is based on Evmos price of $0.46 on 2023.01.18. If the liquidity grows well, we may apply to increase the incentive for the further growth.
1. Why Liquidity Incentive
Evmos native liquidity is still very small and further improvement of liquidity is a priority. In fact, 1M EVMOS is about 2 days' inflationary rewards of Evmos delegating. The value brought by the Liquidity Incentive will exceed the reward itself.
This proposal is not only about Liquidity Incentive, but also about an ecosystem project SpaceFi's whole launching. We hope to bring more use cases for Evmos and more confidence to the ecosystem and community through SpaceFi's performance.
2. Use xEVMOS as the reward, not EVMOS directly
The xEVMOS module is aimed to incentivize long-term holders and reduce reward dumping.
We‘ll launch a non-tradable reward token, xEVMOS, converted 1:1 from the EVMOS requested. xEVMOS earned from liquidity incentive can be converted back to EVMOS with a 30 days unbonding period. Users can also choose to unbond xEVMOS immediately, which will only convert back to 50% in EVMOS. The other 50% will be transferred back to the multisig address of requested EVMOS, which can make the incentive program last longer.
With xEVMOS, we can reduce reward spending and dumping while maintaining an attractive APR and incentivizing long-term holders. The liquidity incentive can last more than 90 days if some users choose to unbond xEVMOS immediately. We can also offer xEVMOS module as a public good for other incentive programs in Evmos ecosystem.
3. Multisig Group (3 of 5)
- 0xCtrlAltApe | Orbital Apes team
- LPX | Evmos DAO Governance
- luisqa | Zenith Station validator
- devd331 | Evmos Community Mod, SpaceFi Captain
- cryptoallen | SpaceFi team
Multisig Address: 0x0bDA81150691522B2Ba0B4e936e498613F795c77 (evmos1p0dgz9gxj9fzk2aqkn5ndeycvylhjhrhptq7tv)
Fund Utilization Plan
We divide the pairs into MAJOR, STABLE, and MINOR categories, borrowing from the incentive allocation in Kickstart DeFi on Evmos proposal by benny lava and other Evmos Governance members. The initial rewards are allocated as follows:
MAJOR: 50%, 5555 EVMOS / day + 29165 SPACE / day
EVMOS / ATOM - total 250k EVMOS + 1312380 SPACE
EVMOS / ETH - total 175k EVMOS + 918720 SPACE
EVMOS / BTC - total 125k EVMOS + 393750 SPACE
STABLE: 35%, 3888 EVMOS / day + 20414 SPACE / day
EVMOS / USDC - total 350k EVMOS + 1837260 SPACE
MINOR: 15%, 1666 EVMOS / day + 8754 SPACE / day
EVMOS / OSMO - total 50k EVMOS + 262620 SPACE
EVMOS / JUNO - total 50k EVMOS + 262620 SPACE
EVMOS / SPACE - total 50k EVMOS + 262620 SPACE
The reward weight for each pair can be adjusted each two weeks based on liquidity & volume data.
TVL Milestone: 1M-2M, APR 146% (no bonding) - 293% (14 days unbonding)
TVL Milestone: 2M-4M, APR 73% (no bonding) - 146% (14 days unbonding)
TVL Milestone: 4M-8M, APR 37% (no bonding) - 73% (14 days unbonding)
The above TVL and APR is based on Evmos price of $0.46 on 2023.01.18.
This is not just another proposal for Liquidity Incentive
SpaceFi is a community project with no VC funding, and has been building in the EVMOS ecosystem since February 2022 at our own expense. We want to make it an engine in the ecosystem with DEX+NFT+Spacebase+Launchpad, not just a DEX. At the same time as the EVMOS Liquidity Incentive begins, we will fully launch the SpaceFi product and SPACE token.
The initial emission of SPACE token will be about 125000 SPACE / day, 70% of which will be used for farming rewards, i.e. 87500 SPACE / day. We will allocate 2/3 of the SPACE farming reward to EVMOS Liquidity Incentive, i.e. 58350 SPACE / day. The remaining 1/3 will be allocated to SPACE & Planet NFT staking and other liquidity incentives.
Space Swap and Planet NFT are already live on Evmos mainnet. Space Swap has been running on Evmos since May 2022 to date, with more than 2,000 early adopters providing liquidity on it. Planet NFT is the Pass of SpaceFi ecosystem, early minting has been finished on EVMOS mainnet and is currently the second largest market cap NFT in EVMOS ecosystem.
Learn more about SpaceFi Products
What will happen next if this proposal is passed
- Space Farm, NFT Staking / Marketplace, Spacebase, Launchpad modules will be launched on EVMOS mainnet. (within 1 month)
- SPACE Token launching and Evmos Liquidity Incentive begins. (the 1st week, trial run)
- SPACE Token and EVMOS Liquidity Incentive fully runs. Genesis Spacebase event will be launched. (the 2nd week)
- Spacebase farming reward PK competition. (the 3rd-5th week)
- SpaceFi trading contest. (the 7th-9th week)
- As liquidity grows, we will consider helping new projects to launch on Evmos through Launchpad, possibly Soul Network or others. (TBD)
- Collaborate with other projects to enrich the use cases. More bridges and assets such as grav.USDT / ceUSDC / stEVMOS (stride) can be added after the effective growth of liquidity. (TBD)
About SpaceFi
spacefi.io is a cross-chain web3 platform on Evmos and layer2 zkSync, with DEX+NFT+Launchpad+Spacebase as the initial product. The first to connect Cosmos and Layer2. It has been building in Evmos ecosystem since 2022.02. More than 40k users have tested SpaceFi products on Evmos and zkSync testnet.
SpaceFi has previously conducted extensive testing and completed three contract audits. Here are the Audit Reports by QuillAudits , a leading smart contract audit firm who has secured more than 700+ web3 projects with $15B+. A new audit report about xEVMOS module will also be released soon. We'll make the products well tested and audited before the whole launching.