UST Pool SRM Grant Proposal

Gm sers, this is JY from Terra, we’ve been big fans of Solana (more on this below) and would like to propose the following:

  1. closer collaboration between Serum and the Terra community; and
  2. $SRM grant for liquidity mining to deepen UST liquidity on Serum-affiliated projects.

Introduction to UST

TerraUSD (UST) is an algorithmic, seigniorage-based stablecoin, issued on the Terra blockchain. It has had tremendous growth over the past three months, with market cap growing from 10B to 16.5B. UST pools are already present on many leading Solana DEXs (including Serum, Saber) and lending protocols (Solend, Apricot, Larix), with good liquidity. For example, UST-USDC is the deepest pool on Saber.

Our involvement in Solana and Serum

Decentralized finance needs decentralized money, and we would love to see further UST adoption on Solana, and Serum specifically. We have been bullish in the Solana ecosystem from its early stages - Solana was one of the first ecosystems that UST was available in, and Terra community has been active in pushing for UST liquidity by providing liquidity incentives from Terra’s community pool. The efforts have been fairly successful, with UST market cap on Solana now at $100mio.

Serum has undoubtedly built the most powerful spot liquidity engine across the entirety of DeFi, successfully replicating Centralized Exchange (CEX) user experience on-chain by fully leveraging on advantages of Solana blockchain. It was natural for Terra community to partner and provide incentives for UST pools on Serum, mainly through Atrix where Terra has provided 2,777 $LUNA ($314k equivalent) for SOL/UST and BTC/UST pools in the last 3 months! The community love to see further growth of UST on Serum and Atrix, especially as Atrix launches its expansion plan to add more trading pairs, and refresh its brand image.

Our Proposal

Our proposal for this grant is 1m SRM tokens. The grant will be used to incentivize various UST pools, including BTC-UST, SOL-UST, etc. over the course of 6 months. Terra community will be matching half the dollar notional in the form of UST to further sweeten the pot for potential LPs and increase capital efficiency of both sides - no need to hedge the market risk of your LP rewards there! The combined incentives would be able to provide ~10% APY for a total value locked of >$70mio, as recommended in previous liquidity mining program proposal.

To foster stronger relationship with Serum and to help Serum grow on our side, we will do the following:

  • Co-incentivize pools with UST rewards to further boost pool attractiveness
  • Support new project launches: for new Terra-based projects launching on Solana (hint, hint), we will make Serum the first point of contact, and potentially first liquidity pool on Solana
  • Further push for composability of Serum/Atrix with our partner projects
  • Co-marketing efforts with Serum and Atrix to increase awareness of Serum

We hope to replicate success we had with Avalanche, where our community’s partnership with Pangolin’s community was mutually beneficial, as it helped to deepen both DEX liquidity and UST liquidity (UST pools’ TVL grew by $60M in 1 month on Pangolin).

Would love to hear Serum community’s thoughts on the proposal, and we’ll be more than happy to calibrate terms based on what we think can foster the most mutually beneficial relationship/TVL growth for both Serum and UST!

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