Last week, I posted this: Bringing Terra stablecoins to Solana
We received a lot of great feedback. This is a follow-up discussion to address some of those points, and to initiate a discussion about how to best allocate the community fund pool moving forward.
At current prices, there are 73+ million units of LUNA in the community pool, which is ~$400M at today’s price. Even after a substantial percentage of this is used to bootstrap Ozone, we should still have ~$100M left over for community initiatives.
This is a lot of money that is not currently being used for anything. IMO we stand to benefit as a community if we use some of these funds for strategic partnerships with other ecosystems, and the applications that are built on them.
One such example of this is Saber (Saber | Solana AMM), which was brought up multiple times in last week’s post. Saber began liquidity mining incentives last Thursday, and now has $88M in TVL, now the 4th largest dApp by TVL on Solana. The USDC-UST pool currently has $6M in TVL.
Given Solana’s budding ecosystem and strategic importance to Terra, Saber’s increasing role in this ecosystem, and their willingness to work closely with the Terra team, I propose we allocate time-boxed / capped LM rewards from our community fund to the Saber USDC-UST pool.
- $UST grows together with growth of other Ecosystems / applications like Saber
- For $UST to be successful, we need exogenous adoption of $UST, and not just in Terra ecosystem on Terra blockchain
- Partnerships drive awareness of $UST and the broader $LUNA ecosystem, which self-reinforces adoption and strength of $UST. I think of the LM incentives as part marketing dollars, part incentive-alignment with external project teams / users
- Initial partnership proposals + LM rewards are time-boxed / capped, which gives both sides an opportunity to evaluate ROI and adjust parameters
- Nominal, minimal cost as a % of total community pool
- Increases circulating supply of $LUNA
Open discussion items:
- How much LM incentives does it make sense to allocate to USDT-UST pool on Saber?
- Mercurial (24,000 LUNA over 8 weeks) can be used as benchmark
- Given that there are multiple stablecoin pools on Saber, what would we want to see from the Saber team to make this attractive for $LUNA community?
My hope is that these initial discussions re: Mercurial, Saber can be used to create a framework for how we think about structuring LM for strategic partnerships for community pool funds in the future. Feedback welcome