[READY] [GF: Phase 1] Sushi - Part 1

📜 Grant Proposals Governance Fund: Phase 1
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Thanks Jack for the emotional support :grin:

Really interesting about the LZ tech for initial burn to mints. Cool thing about xSwap is that it’s easy to slot in additional bridges, so we can definitely incorporate a ZK style bridge into xSwap for users to use when bridging to OP.

In regards to future plans for OP, personally I’ve imagined Optimism being a main test bed / development playground for a lot of our products. One of the main reasons why we haven’t deployed rewards yet on OP too is because we were planning on spinning out our new permissionless Staking Contract here to start.

Also actually am curious though what everyone thinks in regards to the amount of rewards we are asking, initially we wanna keep it low to just get a good start going here but we also wanna keep it low so we can do other cool things with OP grants n stuff down the road especially if/when Meji comes through and opens up an easier and streamlined way for funding grants / further development.

Totally agreed on Meji as well, a lot of us are really excited with the proposal / work already being done for it as well. Which is why I do think it’s important to get a kick start going on OP for 180 days, and then when Meji kicks in the fly wheel will already be in place to really get it spinning here.

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Thanks a lot @jackanorak

@Jiro Has covered it very well. I would just like to add few more details to it.

To, start with we have already deployed several of our products on Optimism - Trident, SushiXSwap, BentoBox and Furo. These all our new products powering the best of Sushi, just for OPtimism.

Sushi is very focused in the Multichain vision. We believe that the future will be multichain first. We are taking careful steps in that direction. The first multichain expansion was with the SushiXSwap, which gave users the capability to do cross chain swaps. Our next step in this expansion is Sushi 2.0 UI. Which is a UI that is built to rule them’all and blur the lines between different chains for the user. Users will be able to see all the opportunity at Sushi across all the chains in a single page, providing superior UX than any other dapp in the ecosystem currently. This would allow better visibility for Optimism as users don’t have to change chains to see the opportunity. The UI would also allow users to LP directly into these opportunities via SushiXSwap. So, now users see all the opportunities in a single page, and no matter which chain they have funds in, they can easily LP into OPtimism in just a single transaction.

We will be also deploying Bentobox Strategies that will provide better capital efficiency for sushi users on Trident & Furo. These strategies will be deployed to dapps on OPtimism, hence contributing to the larger ecosystem.

We are also launching a new Pool Type on Trident really soon, which will allow users to trade the correlated assets better, it inherits all the benefits of the bentobox as well.

As @Jiro has already mentioned, our Permission-less Staking will also be released on OPtimism, providing incentive for multiple projects inside OPtimism ecosystem.

With all the benefits we provide to the OP ecosystem and it’s users, it will help us build the strong foundation and provide users to move from various chains to OP :slight_smile: The main component for this would be our Trident and SushiXSwap, coupled with the new UI, users can see the opportunity at OPtimism and can easily traverse into it. So, the above grant helps us to build strong foundation on OPtimism and paving the way for future products to easily extract the benefits and give it back to the OP users and the ecosystem.

On the Meji Proposal, like every tokenomics update, we would be looking at all the aspect and how it impacts the Sushi Ecosystem, as unlike other protocols, Sushi has been working towards a DeFi Powerhouse and soon a NFT Powerhouse too :wink: We would be looking at various data points and try to improve the model from that gathering, but as @Jiro outlined, it will make our process only smoother.

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Thanks for the proposal! If you plan to have this reviewed in Voting Cycle 6, can you please specify which committee should review your proposal (NFTs and Gaming, Tooling, or DeFi) under the grant category field in the updated proposal template for Cycle 6?

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Hey lavande! Thanks for sounding out the new proposal structure. I’ve made some changes and also added more details into the proposal. It should be good to go. :grin:

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Feedback
After submitting our draft proposal a month ago, the team has been constantly gathering feedback from various community leaders and members. Below is a short summary of the concerns and what we’ll be doing to address them.

1. Extend Rewards Distribution Cycle: Previously, we were planning to finish distributing the $OP incentives over a 6 month period. However after some feedback, we decided it would be best to extend it to a 1 year distribution period so liquidity providers will be incentivized to keep their liquidity on OP. Sushi will be matching and co-incentivizing the pools as well.

2. Be clear about the matched incentives: Initially we gave an estimate of around 100-300 Sushi rewards per day for each of the pools. We are now clearly defining the reward numbers for each pool.

  • 300 Sushi per day for ETH-USDC
  • 250 Sushi per day for ETH-USDT
  • 150 Sushi per day for OP-ETH
    Do note that we plan to expand and incentive more pairs going forward. The pairs listed above are what we are proposing as an initial kickoff.
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Hey @Trudahamzik curious about the reasoning behind extending the distribution cycle. If anything I’d recommend returning it to 6 months, if not shorter – that way you’d be able to reapply with some more validation and even to support some of the additional tooling.

Saying that LPs will pull at the end of rewards otherwise kind of runs against the premise that these rewards incentivize activity beyond the end of the grant :slight_smile:

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We’re definitely open to adjusting the distribution cycle. Happy to take additional comments. :grin:

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Sharing our feedback from DeFi Committee A on this proposal:

“The team is well established and this proposal has great co-incentives. However, we would like to see this proposal broken up into 2 separate smaller requests, each with a 6 month timeline. Once this proposal has been resubmitted into 2 separate, smaller requests, we would be happy to give a yes vote. We are requesting that the updated proposal get re-submitted back to DeFi Committee Group A.”

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Hi Linda,

Thank you! Sushi definitely appreciates the feedback given by the team. I have split the proposal into 2 parts:

Part 1 - [REVIEW] [GF: Phase 1] Sushi - Part 1 - #13 by jackanorak
Part 2 - [REVIEW] [GF: Phase 1] Sushi - Part 2

I have added additional details in part 2 of the proposal. They have been bolded so you can easily locate them.

Sushi is happy to address any additional concerns or questions the committee may have.

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I had reviewed an earlier version of this proposal as part of DeFi Committee A and our feedback was incorporated. I am an Optimism delegate [Delegate Commitments - #37 by linda] with sufficient voting power and I believe this proposal is ready to move to a vote.

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I am an Optimism delegate [Delegate Commitments - #18 by katie] with sufficient voting power and I believe this proposal is ready to move to a vote.

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I am an Optimism delegate [Delegate Commitments - #65 by mastermojo] with sufficient voting power, and I believe this proposal is ready to move to a vote

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hi @Trudahamzik, thank you for your well written proposal and your adjustment to the feedback by community members and delegates. I personally value Sushi for its solid products and its ability to ship across multiple areas across swaps, cross-chain, lending, NFTs, and streams.

I recognize that my feedback might come in a bit late, given that you have started gathering feedback since mid-august. I hope you wouldn’t be frustrated with the long process and it would be a fruitful experience for you, Sushi, and Optimism.

Given your diverse product ranges, I will further take @jackanorak comment for Sushi products and encourage you to split the incentives not only towards the three pools, but also towards others. Sushi contributors mentioned correlated assets pools, permission-less staking and others. I might not be fully updated to what Sushi has been cooking, so please update me where I am at fault:

  1. Kashi Markets: Kashi Markets isn’t on Optimism yet. Is there a possibility deploying a few selected isolated pools on Kashi Markets to Optimism, and add incentives to them.

  2. Limit Orders: Limit orders aren’t yet available on Optimism. Is there a space to incentive using them?

  3. Shoyu 2.0: Your future open marketplace for NFTs. Is there a place for an initial optimism launch, instead of mainnet?

  4. Furo Stream: This is a great product that is well underused. Is there ways to push for a wider adoption for DAOs on Optimism?

Interested to hear other community members and delegates feedback on this well.

Sushi is a fully loaded Swiss Army knife that is yet to unleash its potential on Optimism. IMHO, your proposal would be much stronger if you manage to cooperate with the different teams in Sushi to collectively increase usage for Sushi on Optimism.

Lastly, a logistic question to clarify the splitting of the proposal: are you including both Part 1 and Part 2 in cycle 7 for a voting round? My understanding is that Part 2 proposal would come in 6 months after Part 1 for review, given how the incentives have worked.

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Hi Marc,

Thank you for the feedback. The team is humbled by your words. We are constantly building and have more plans to ship additional products in the future.

Here are some answers to your questions:

  1. Yes, we do plan to launch additional pools and split the incentives among them as well. As our main focus is currently SushiXSwap, we decided to start off with the 3 most popular pools (OP/ETH, ETH/USDC, ETH/USDT) to draw initial liquidity over to OP. We do have plans to offer incentivized WBTC, Sushi & Synth pools as more liquidity flows into OP. We also didn’t want to go crazy right off the bat with the incentives but gradually ramp them up over time instead.

  2. Kashi Markets & Limit Orders will be launched on OP for sure. We’re currently in the midst of integrating them with our new Sushi 2.0 UI. This might take a while, but we’re hoping to get them up and running asap.

  3. The team from Shoyu plans to launch only on mainnet for now. But yes, there will be a place for an Optimism launch in the future.

  4. Thank you for highlighting Furo, we do have big plans for it. Furo currently has a TVL of almost 100M. We’re planning to use “Sushi Academy”, an education hub that features content on all things Sushi to educate users on our products and push for wider adoption. We also want to get our new head chef to actively engage with other native OP protocols and ensure they know that Sushi has a streaming/vesting product that can be implemented with their existing DAO tooling system e.g Making appearances on OP radio or various AMAs held by the OP team.

  5. Part 2 of the proposal should only be reviewed in April 2023. I will not include it in cycle 7 for a voting round.

Feel free to DM me if more clarifications are needed.

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Hey @Trudahamzik
I’m excited about this thread; I hope we get to see that creative and innovative Sushi again.

I leave you with some questions

Is Sushi one of Stargate’s qualified partners?

Can you tell us which bridges are integrated with Xsushi? what are the integration possibilities?

What will Sushi’s new stake on optimism look like?

Could you elaborate more on this statement?

Finally, do you have any metrics on Sushi’s performance in other chains after the subsidies received?

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Hi Jadmat,

Please find replies to your questions below:

  1. Yes Sushi is one of Stargate’s main integrated partners. As of now SushiXSwap is integrated only with Stargate. We are currently in discussions with various bridges to get them integrated as well.

  2. To elaborate more on the statement, Sushi’s long term plan is to help increase liquidity and trading volume on OP up to a sustainable level where neither extra $SUSHI nor $OP rewards are needed to incentive liquidity providers to remain on OP. e.g. Earning the swap fees alone will be enough to keep liquidity providers for various popular pool pairings happy

  3. You can find a chart below which shows the Swap, LP, Lending & Borrowing activity on Sushi Polygon. Unfortunately I could only retrieve data from October 2021, but we started our dual reward incentive programme in May 2021 hence the uptick in activity. Fast forward to a year later (in a bear market), you can see that the current on-chain activity still sits in a healthy 5K - 20K range.

Swaps, LP events on Sushi Polygon
Swaps, LP events on Sushi Polygon866×741 114 KB

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Thank you for your feedback
Some ideas that were not clear to me

Regarding the new Stake on Optimism; is there anything you can tell us?

What do you consider to be the main advantages of Sushi over competitors such as Velodrome, Uniswap or Beethoven?

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Hi Jadmat,

Not too sure what you mean by new stake. Would be great if you could elaborate more.

As for Sushi’s strength, I would say that we’ve evolved over time and have churned out a diverse range of products that definitely would be able to help bring more TVL to OP.

Current range of Sushi products:

  1. Bentobox – Vaults
  2. Trident – AMM Factory
  3. Swap – Regular token swap
  4. SushiXSwap – Crosschain
  5. Onsen – Liquidity mining
  6. Kashi – Lending & Borrowing
  7. Miso – Launchpad
  8. Furo – Token Streaming & Vesting
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Maybe I have misunderstood and it is not a new stake mechanism?

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Hi Jadmat,

Ah got it. The permissionless staking my developers were talking about is for the Onsen liquidity mining programe. We plan to make contracts permissionless in the future so protocols can manage the rewards that they want to give out to liquidity providers themselves instead.

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