I wanted to share with you all an incredible proposal that we believe has the potential to push Secret DeFi further than ever before. With a record number of launches on the horizon, including a new bridge for EVM assets, new SNIP-25 tokens, and at least three DeFi protocols (Shade, Blizzard, and Secretswap 2.0), we have a unique opportunity to bring an unprecedented level of attention to our ecosystem.
At SCRT Labs, we believe that we should seize this once-in-a-lifetime opportunity to support these DeFi projects and make the biggest possible splash in the industry. That’s why we propose a 6-month incentive program, starting April 18, 2023, with a “surge” period in the first three months that will offer double rewards to incentivize rapid project launches.
We suggest that rewards are granted according to the following guidelines:
L1 Rewards will be given as an LSD (each protocol can choose which one), increasing the overall TVL. In addition, to encourage hodling, there’s a strong preference to giving out rewards with lockups (or to give higher APR for those that lock their LSDs). Shade has offered to support this through Shade Bonds, and projects are welcome to use this mechanism or create their own.
Each project should contribute 3x the L1 rewards in dapp tokens ($1 SCRT for every $3 in dapp tokens).
Projects must submit a one-page proposal detailing their supported pools/assets, projected TVL, APR, and required rewards. This applies to all DeFi protocols, not just DEXes. We already received several petitions and expect to get others as soon as possible.
Dapps should maximize their utility while benefiting Secret in the most effective way. For example, we initially considered incentivizing a USDC-USDT stable-to-stable pool on Shadeswap. However, after receiving feedback, we agreed that incentivizing SILK as the direct stablecoin pair would be a more beneficial approach for both Shade and Secret.
We propose an upper cap of $4m in rewards over the next six months, with $1m in SCRT rewards. SCRT Labs is willing to cover half of that cost. We aim to continue chain-paid rewards beyond the six-month mark, using a more sustainable mechanism for a broader range of apps. The monetary ask from the community pool is therefore the equivalent of $500K in SCRT for six months.
There are a few open questions to address:
How can we secure funding for the chain’s portion in time? Options include the community pool, the Terra pool, a new tax, or a mint. We have no opinion on this.
Who should handle rewards? We suggest SCRT Labs for efficiency, and we’ll handle petitions while making approved petitions public.
How do we determine the exchange rate between the dapp token and SCRT? We propose refilling rewards monthly and determining the exchange rate at that time.
This is an incredibly exciting time for Secret, and we believe that this proposal could mark a huge turning point for our project. With our upcoming technical upgrades, PaaS, and Secret 2.0, we are perfectly positioned to capitalize on this momentum. Let’s make it happen!
As for the funding of this, here is my opinion on it: Using the community pool for funding 500k USD is no viable option, since the overall pool is at 750k SCRT (around 500k USD @ 66c) Using community pool funds for the Surge would therefore cause the pool to run out of funds. I think it would be best if we use the remaining funds of the Terra’s builder fund, since these would have been burned soon anyways.
Super excited for the surge. Agree with Alex that if Terra fund is an option and there are unused funds it makes sense. No issues with SCRT Labs being trusted for the funds.
Burning the Terra fund and then minting an equivalent amount doesn’t make sense to me really, the same goes for a new tax.
So, in my view, there pretty much are 2 options: either we use the Terra fund (assuming the chain votes for this, knowing that it will not be burned unlike originally proposed), or we use the community pool.
If we decide to use the community pool I’d expect monthly proposals to make sure we use the correct valuation (based on monthly topups as proposed in the opening post). That has its own downsides of course.
Very excited for the Secret Surge, no preference on how it’s funded.
I think Secret Surge is a great initiative to re-ignite interest in our ecosystem. Trying to get something cohesive and coordinating multiple products is the way to go.
In terms of funding, I think it needs to come out from the community pool without a doubt.
I am absolutely in strong support of Secret Surge.
With Blizzard, SecretSwap 2.0, Sienna, and Shade all gearing up with a variety of products and features this is an incredible opportunity for Secret DeFi to emerge as a highly differentiated and powerful set of privacy-preserving products. I believe this initiative is definitely worth the risk - bringing liquidity to Secret Network is an important part of igniting the DeFi ecosystem and attracting builders.
With respect to open questions:
Community Pool makes sense for this as it gathers proper consensus from the chain
Agreed that SLABs is best positioned as a trusted intermediary to represent the chain with respect to Secret Surge rewards management
I’d recommend monthly reward refills for simplicity sake. Some folks suggested shorter timelines so that price is better represented (like every two weeks). That will be a trade-off between simplicity of reward management and accuracy. Also recommend price uses a two week rolling average (perhaps an exception could be made for brand new tokens, maybe only need 48 hours to a week of data to get started)
Overall, Shade looks forward to strongly supporting the Secret Surge proposal.
First off, I am in love with the idea of surge and can not wait to ignite DeFi on SCRT. I think the new DeFi platforms and improvements to existing ones will be a big win. My hope is that people come for the rewards and stay for the UX.
I like the incentive to lock up LP and rewards having a lockup, that will help make the impact last longer.
As to funding, it seems like the community pool is the consensus so far, and I am ok with that as it does make sense. But it does bring me to something that has worried me for some time. Our pool is almost empty so we need to consider something to refill it somehow otherwise we just won’t have the ability to fund anything at the community level for a while. We don’t want to be empty when cycle is moving up. (That discussion should probably be in another proposal rather than here.)
Slabs seems like the right choice for rewards management.
Monthly refills does sound best, using an average price.
DEFI dapps are ideal gateway into Secret Network and timing should right since market is picking up and more people would have an interest to experiment and hopefully stay. Great proposal!
On the other side many prevously expressed the opinion that community funds should be primarily spent on infra and better tooling. This is not the case here. Work on better tooling should continue and hopefully this wont simply drain community fund.
Also incetivizing secretswap willl have 0 effect, if situation around SEFI is not resolved.
I love the proposal and believe it has considerable merit.
Have you considered the possibility of publishing it as a secret-hackathon? I believe that dApps operating on different blockchain networks, especially those with active development teams, would greatly benefit from bridging to Secret due to the strong incentives and long-term perspective that this proposal offers.
Moreover, it’s worth considering that while the crypto space is full of brilliant developers and technical experts, it often lacks smart business strategies.
It would be excellent if the proposal came with an “advisor” team that could help turn the project into a viable business with long term liveness, in addition to its technical strengths
Great to see such an exciting proposal from SCRT Labs!
The surge program proposes a 6-month incentive plan for DeFi projects in the Secret ecosystem, with a focus on increasing TVL and incentivizing rapid project launches. This proposal seems well thought out, and I believe it has the potential to bring even more attention to Secret Network and its growing DeFi ecosystem.
As a member of Secretswap 2.0, I fully support this initiative to incentivize and accelerate the launch of upcoming DeFi protocols ( Blizzard, SecretSwap2.0, sienna and Shade) with a range of products and features on Secret Network.
My opinion is that Secret Network should strive to becoming home ground of more than just DeFi applications.
Following this I believe the suggested amounts to be spent on LP for DeFi apps only, is kind of irresponsible towards the above if they are to be covered from the community pool.
Better funds allocation of the said pool could be funding independent research in the privacy and security properties of the network, tooling and improvements of the L1 etc.
I think almost everyone will agree that the growth of any blockchain has been through its DeFi suite. While privacy may add some quirks to this, I don’t think it makes us special at all and is void of needing a DeFi suite that has actual use.
I also think that holding out for people to come to the community pool to build useful stuff and actually deliver is over.
In the three years since Mainnet, I do not believe there have even been three successful community pool spends, and those that were successful came at the beginning of Secret Network’s life.
I would like to believe that the Community Pool is a good resource and that we can make it better, but at this point - I don’t think it can.
I would like to believe that the Community Pool is a good resource and that we can make it better, but at this point - I don’t think it can.
In this case why don’t we vote on removing it altogether? At least this will lower the network’s inflation. Same question goes for the 10% foundation tax
If you’re talking about the Community Pool in isolation (won’t comment on Foundation Tax here), then sure - I wouldn’t be opposed to removing it altogether.
Appreciate everyone’s comments. It seems like the feedback is generally positive around doing this, but there isn’t consensus about where the funds come from. On balance, reading everyone’s suggestions, and in the interest of moving forward, we suggest:
50% comes directly from SCRT Labs, as proposed
25% comes from the Terra Builders Fund (this will be included in the proposal so people can vote on this, as it’s a departure from the original proposal)
25% comes from the community pool
The community’s pool portion would be allocated on monthly spend proposals to a wallet SCRT Labs controls. The first month would be based on a projection of the current SCRT price. From the second month and on the request would adjust to reflect SCRT’s price changes - basically, if SCRT increased in price, and let’s say the community should provide 100K additional SCRT for the coming month, but 25K remain from the previous month - then the ask would be for 75K (and vice versa). After the 6 months period, we can have a final account - or roll over the remaining rewards (if any) to the longer term L1 rewards plan, which I assume we will have if this is successful.
Regarding proposals:
We have received one from Blizzard
We have a received a partial one from Shade and are expecting an update
We are expecting one from Sienna
We are in conversation with Secretswap 2.0 but have yet to receive a confirmation or plan from them
Other feedback that was raised is around valuation (some tokens are not valued yet). We plan to adjust the pools on a weekly basis (assuming the DeFi platforms allow this) for the first month, to avoid volatility spikes. Starting on the second month, we will move to a two week cadence. Starting for the 4th month, we will move to a monthly cadence.
Everything I shared here is provisional and up for discussion - feel free to comment.
We plan to go on chain in a week with a proposal that includes the first community spend portion (assuming people accept this suggestion).
I think it is too early, it is a big money and I think the proposal should be discussed more
We need to make sure that the high liquidity can be maintained after the incentives end and the Surge will only serve to kick-start adoption of these technologies, meaning Secret needs to deliver fully sustainable DeFi ( using LSDs, stableswaps, Uni V3 like positions,… )
@Jiricepelka i disagree here ( at first i didnt think it was okay to get this done but now i do) , i think it is important to have this, only point is that the foundation needs to have some Marketing people that are top notch to spread the word since Secret Network has a lot of potential but that needs some good marketing moving forward.
