STP-7: Create and fund the Innovation Pool

Author	Cavalier
Status	Draft
Implementor	TBD
Release	TBD
Created	2023-10-03

Simple Summary

Establish the Innovation Pool to stimulate developer activity on the v3 platform, and fund it with 100,000 SNX from the Treasury.

Abstract

Create the Innovation Pool, owned by the TC multisig, and fund it with 100,000 SNX from the Treasury. Notify the community that prospective protocols can request collateralization for their Market via the STP process.

Motivation

v3 is ready for new Market proposals, but does not have appropriate liquidity. A dedicated Pool for newer, higher risk or delta exposed Markets is required to encourage development activity on v3.

Specification

Overview

Once implemented, the Innovation Pool can offer liquidity to newer Markets at the discretion of the TC. The existence of liquidity intended for newer Markets lowers the barrier to launching, and encourages developer activity.

Rationale

The Spartan Council Pool is the default Pool for new LPs, and expected to take a conservative approach to backing Markets. The SC Pool is likely to back Markets which are established and delta neutral by design, and so is not suited to new or higher volatility Markets. The introduction of this dedicated Innovation Pool would enable LPs to allocate to novel or more volatile Markets, and participate in the wider ecosystem of new Markets.

Designed to support experimental markets, the Innovation Pool will function independently from the Spartan Pool. As the pool owner, the Treasury Council will have the authority to delegate liquidity from the Innovation Pool to any Market. Market developers can request liquidity for their Market from the Innovation Pool with an STP.

Financial Specification

Allocate 100,000 SNX to the Innovation Pool. At $2 SNX, and 200% minimum liquidity ratio, this pool could provide $100,000 in liquidity - if the TC does not mint the permitted sUSD. If TC does mint sUSD @ 500%, the availalbe liquidity would be $60,000.