Good afternoon Sundae community members. I wanted to start a discussion on what viable ideas are there for the DAO community to vote on that can help increase the utility behind Sundae’s token. Fee sharing comes to mind ie the way Indy tokens (from Indigo) are staked and stakers receiving fees from protocol usage. Or fee discounts based on amount of sundae tokens a users possess when using the protocol ie like Minswap does. Ideas that gain traction can be brought to Sundae Labs attention and if there’s a viable pathway to implementation we can follow the proposal steps leading to an on chain vote. Please share your thoughts below and be as specific as possible.
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Personally (speaking just for myself, since we haven’t discussed it as a team yet), I’m in support of both of these uses, depending on the amounts, especially after we upgrade our contracts.
Right now, because we focused on decentralization and have 30 scoopers, the overhead of building and submitting a Plutus v1 tx, and the overhead of running the infrastructure, and the overhead of claiming rewards because of how the initial contracts were designed, all contribute to the scoopers just barely breaking even (and often taking a loss); So there’s not much room to carve out a fee or discount for SUNDAE token holders, unless they’re also in favor of raising the fee.
However (benchmarking is still ongoing), we expect big savings on all of these fronts with the new contracts;
Another source of revenue the new contracts will unlock is the staked ADA in the pools. The community will need to decide where to direct this ADA, with some options being:
- back to the LP providers from the pool that generated the rewards
- towards SUNDAE token holders
- towards the Scoopers, allowing the scooper fee to be lowered
- towards Sundae Labs, for continued maintenance of the primary portal to interface with the protocol
I don’t have a strong opinion on any of those four, personally, I think they’re all great uses.
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About the continued maintenance, what revenue source does Sundae Labs have today and for how long if limited?
Will Scooper fees no longer be an issue using a Hydra solution in the future? (Is it too early to think about Hydra solutions?)
Right now, Sundae Labs makes no money from the DEX. We have a decent runway, and supplement it with contracting work within the ecosystem. We’re working on building up alternate sources of revenue, such as governance, sundae rewards, etc.
Fees will likely be cheaper on Gummiworm, but yes, the protocol will still need to pay for the infrastructure.
Additional use case is welcome, but currently the dynamics of Sundae just changed with new yield farming mechanism.
This means there is tokens up in various places eg in delegation/lp/governance.
It would be nice to also think how it might affect its other use cases.
I would also think the focus right now should be getting the TVL and trade volume.
community need to identify critical pairs in ecosystem so that incentivise can be directed to attract tvl for those pairs.
I have been thinking about this in terms of liquidity providers. Staking the ADA helps the provider, the DEX, and Cardano (helping to secure the protocol). But their needs to be some reason to hold on to the Sundae token, for it to hold its value.
That could come with a requirement that stake pools hold a minimum amount of Sundae, and pool selection could be randomly determined (per epoch or several epochs?) based on the amount of Sundae tokens held (similar to block production selection in ADA–though it shouldn’t be that complicated).
Voting on Stake Pools by Token holders has not proved to be very effective. Low participation in other DEX’s shows that it is too much effort for any value gained by token holders–except for the Stake Pool operators who seek to game the system.
Determining a formula for participation in the DEX’s revenue streams in general (Scoopers, Stake Pools, etc.) should require Sundae token holdings.
Extra information that could be valuable to traders could also be unlocked by holding x amount of Sundae Tokens and/or a purchased or earned NFT.
Of course all of this requires coding to implement. But I believe these, and possibly even discounts could be provided to levels of Sundae token holdings.
Even if only whales got discounts, their holdings of Sundae Tokens increases the value of these tokens for the rest of us. Even so, I don’t believe discounts will be the first thing to help lift the holdings of Sundae Tokens.
Just my two cents from experiences on Sundae, and other DEX’s.