[RFC] Migrating Liquidity to SushiSwap

Background

SushiSwap and Pickle Finance are now partners within the Yearn ecosystem. It makes sense to explore synergies and collaborate with our partners. SushiSwap, being an AMM, provides an opportunity for us to migrate our existing PICKLE/ETH liquidity from Uniswap.

0xNigiri, COO of Sushi, recently dropped by our Discord to express an interest in collaborating as well:
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Currently, about 75% of all PICKLE rewards are allocated to the PICKLE/ETH LP pool. This is intended to be 65%, but the pDAI farm was decomissioned without having its rewards be re-allocated. These rewards are what is up for consideration in this proposal.

Proposal

Option #1 - allocate ALL of our rewards to Sushi

This option represent’s Pickle’s greatest possible commitment to helping Sushi increase their liquidity. By migrating all of our current PICKLE rewards to PICKLE/ETH SLPs, we signal our intention for Sushi to be the home of PICKLE liquidity/trading.

However, this option is not without drawbacks. One factor to consider is that our liquidity may be fractured. As a relevant case study, Cover Protocol provides its liquidity mining rewards to a Sushi liquidity pool. This has often become a source of confusion on their Discord since many users default to Uniswap. Despite the lack of COVER incentives, about 25% the trading volume happens on Uniswap regardless.

Option #2 - allocation a portion of rewards to Sushi

This option accepts that fractured liquidity might be a reality and comprises incentivizing a healthy liquidity pool on both Uniswap AND SushiSwap.

For example, under this option, 50% of the current PICKLE/ETH LP rewards can be allocated to those staking PICKLE/ETH SLP tokens.

Other considerations

SushiSwap has recently introduced the Onsen, which replaces its Menu of the Week program. The Onsen features the ability for SUSHI incentives to be applied ON TOP of our PICKLE incentives:

We will make it easy for projects to contribute to a Joint Liquidity Mining contract in a few weeks by releasing a wrapped MasterChef contract where they will be able to distribute their own tokens in addition to Sushi. (Double the yield!)

However, it is currently unclear whether SUSHI rewards to Onsen pools can serve to incentivize PICKLE liquidity long term. In the case that it can, this can be advantageous for:

  1. reducing PICKLE’s need to incentivize its own liquidity; and/or
  2. making SushiSwap the preferred liquidity pool for Pickle, even if Option #2 is pursued.

Conclusion

We’re excited for the opportunities to collaborate with SushiSwap and others in the Yearn ecosystem going forward. We invite your thoughts and comments on this proposal.

8 Likes

I think it’s a solid idea. For option 1 do you mean all of the UNi LP rewards move to Sushi, ie the 75% emission?

I’d actually be in favour of Option 2, then once Pickle is integrated into Yearn and DILL/farms go live we can reduce the UNI rewards to 0% and have just 32.5% going towards LP? That’s a lot of Pickle that could be better allocated once we are up and running.

2 Likes

ELI5 that we just “migrate” all the UNI LPs to Sushi and earn SUSHI on top which can be reinvested, effectively increasing the yield?

Why didnt we do this yesterday?

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I’d go for 75% 25% Sushi Uni rewards. If we want to move forward, might as well go in 1 ecosystem. Or when PICKLE is integrated into Yearn, we can go 100% there like chimaera said.

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Why do we still need 75% of the pickle to go to liquidity? I thought that the idea of the smart treasury was that the treasury would supply the liquidity and we could use the pickle emmisions to attract more TVL.

2 Likes

absolutely
Pool2 will soon be a thing of the past.
We should move to Sushi and use this chance to cut LP rewards to 25% and attract some TVL with the improved yield on Farms.

2 Likes

I advocate for the 50% position - Option #2

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I think option #2 makes sense while Uniswap powerusers and newbies make sense of sushiswap

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IMO - as Pickle is under an umbrella of partnership and collaboration with the other protocols (Sushi being one of them) we should move most if not ALL of our Pickle emission reward to Sushi. Few reasons:
a) Sushi and Pickle are part of the partnership with Yearn and this move should be beneficial to both protocols.
b) If the trading volume is expected to still occur on Uniswap, people will be able to provide the liquidity and earn the 0.03% trade fees (maybe earn even more as compared to becoming a LP in Sushi if the liquidity is sparse).
c) There’s a few partnerships over at Sushi and notwithstanding the current Sushi emissions reward, LP in Sushi has the chance to earn MoonSushi (Polkadot network) or even Serum (once it is live).

Concurrently, we have the SMART Treasury effort in progress and over time, we should see most of the liquidity move over to our Balancer Smart Treasury.

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Support, do we also migrate liquidity of Cornichons?

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lol i like the idea - though i don’t think we will get sushi emissions for this :smiley:

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Option 1, it supports our partners the most. The drawback is overcome by good communications.

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It’s important imo to incentivise liquidity on Uni as this is where the majority of users go and avoid new users suffering slippage.

It’s also important to build strong links and integrate into the Yearn ecosystem properly. I’m a big Sushi fan and I hope we can build long term relationship with permanent Onsen boosts.

We need to talk more with Sushi and see what we arrangement we can come to. I think both options have value.

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absolutely. “keep it in the family”.

sushi should have an interest in incentivising YETI products, so let’s try.