xSushi Liquidity Mining

Just wanted to start a post here on xSushi LM. xSushi is far more versatile than the Sushi token and presents a unique opportunity to really lean and gain liquidity and volume.

If you own Sushi, there isn’t much you can do with it (it’s a worthless farm token imho). If you stake Sushi into their Sushibar you will receive xSushi in return that accumulates in value through fee sharing. Brilliant. Many projects with farm tokens are doing this as this is a great opportunity for them to distribute to LP’s. It is the new basic tokenomics in Defi.

In the past we have whitelisted other projects to gain volume and liquidity who’s tokens were actually quite useless (i.e. UNI). The xSushi token should continue to see more volume in the months as Sushi grows and grows and I’d love to get some of that liquidity on Bancor.

Currently, there is $38.7M LP xSushi/ETH on Sushi and $852k on Bancor (and rising). If you are bullish on Sushi and value their innovation in the space, what do you do? I would stake all my Sushi for xSushi, but here’s the problem. Once I get xSushi there isn’t much to do with it. Your current options are LP with it on Sushiswap (suffer IL) or stake on AAVE as collateral at a mere (0% APY or 25% LTV), not good.

I think if we added LM on xSushi, it could potential raise TVL to over $10M, eating a good chunk of Sushi liquidity (that is on Sushi). This is how we win. We work with other projects and expose them to how awesome no IL is. I like the Sushi project (obviously not as much as Bancor) and this could be a great relationship booster, while also gaining some nice TVL.

Any thoughts? If others are interested, I can work on proposal.

Thanks,
Witter

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I actually really really like the sushi people, i’ve taken a small part in their governance - immortalized forever at the top of the sushi phantom troupe governance debacle. I think this is honestly a great idea but it lacks the support of the sushi team and community. I would like to see us rally some team members and some type of collaboration on their side aswell. I have two ideas I think would be incredibly helpful for Bancor and could be achieved with the help of sushi.

  1. An Idea would be for us to build a Kashi Pool and create a flashloan centered around vBNT leverage loans. I think this would be super popular and has some clear advantages. Right now in order to take a leveraged BNT position you have to Deposit BNT → Receive vBNT → Sell vBNT for BNT → Repeat. This causes the user to have to open multiple BNT positions costing a ton more gas when they have to eventually withdraw each position individually. Kashi could be used to borrow the amount needed through a flash loan and have your position consolidated in one rather than a bunch. I think this is a particularly good idea, would also be a great way to involve with Sushi further

  2. We could also do dual LM in some form like xSUSHI on Bancor and vBNT/BNT on Sushi. This would be helpful for us to get listed on Lending Platforms, part of what they ask for is variety in LPs and multiple Liquidity Pools spread between AMMs.

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I definitely agree with your suggestions. Never thought of doing a Kashi pool, but I like it. Currently we have no BNT or vBNT liquidity on Sushi. I have created Kashi pools before, so I wonder if this is possible with no liquidity on there? Honestly, not sure.

I like the idea of Dual LM, lots of mutual benefits for both teams here. Sushi can get more BNT liquidity then the Kashi pool could let vBNT/BNT holders use their liquidity as collateral (we still can’t do this on COMP or AAVE). I don’t know anyone on the Sushi team, but I wonder if we could approach some of their folks for this?

Anyway, awesome thinking, thanks for the feedback.

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Regarding building out liquidity for vBNT/BNT in other protocols, I think the best way to go about that is for us to actually incentivize that activity by having those LPs stake their LP tokens in some sort of a vault on our side that we would incentivize with BNT (they are still subject to IL but it is better than nothing). I think we will find it very difficult for other protocols to incentivize a vBNT/BNT pool with their own tokens even if we were to do an LM campaign for their governance tokens on our end. They don’t really get much in return (they lose liquidity on their own DEXes) and both balancer/sushi already incentivize their governance TKN-ETH pools with their own native tokens (I had shared the possibility of an incentivized vBNT/BNT pool prior to this proposal with OP but thinking more about it, I don’t think sushi or balancer will go for it).

Uniswap worked great for us because they don’t have an active LM campaign for their UNI LPs and it was also good publicity (protocol with the most users by far). It looks like we have managed to retain some decent liquidity in that pool even after the LM ended. An xSushi campaign for awareness could be similar but I don’t think we will get much in return with such a campaign and the DAO might find it hard to provide LM for a competitor. I say this as a xSushi LP in the BNT-xSushi pool FYI (I had a chunk from the vesting).

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At the cost of going offtopic, we could maybe do something similar to the Bonds used by OHM in order to build up LP tokens in their treasury, just a thought. I think bonding is super useful and under utilized in crypto.

Not familiar with how that works. What would that look like from our side?