[INVESTMENT] USDC deployment - Saber + Sunny 2

DAO Governance
#1

See initial proposal here and previous Saber + Sunny deployment here.

I think the UST-USDC LP looks attractive now (6% SBR + 9% SUNNY). Moreover, from the updated Sunny gauges going live in ~3 days, reward should increase even more

Therefore I propose we deposit 600k USDC in the UST-USDC LP on Saber and then stake the LP tokens on Sunny

1 Like
#2

given that the WH hack has passed, it seems safe to redeploy in this pool. Currently Sunny shows 5% SBR + 21.3% in SUNNY

2 Likes
#3

totally agree - let’s do that.

Should we also vote on what to do with the proceeds, meaning do we want to keep sunny and saber or to sell them and buy sol?

#4

i think SBR is a good one to keep and likely SUNNY too seems undervalued based on current emission vs token price. Considering they still haven’t introduced a proper governance with all the SBR they have it’s worth keeping it I think. Only thing is about the team which is still anon afaik

#5

Could you explain why you think SBR and SUNNY are undervalued? I find it really hard to justify any valuations of the tokens, given their limited utility - which is hard to pin down in dollar/SOL terms.

#6

So SBR and SUNNY are the equivalent of CRV/CVX on Ethereum.

SBR:

  • mkt cap $42m vs $1.38bn of CRV
  • TVL $664m vs $19.1bn of CRV

SUNNY

  • mkt cap $27m vs $1.4bn of CVX
  • TVL $486m vs $13.3bn of CVX

So in terms of MC/TVL ratio, SBR is slightly better value than CRV with however the project being in a much earlier development stage, and similar for SUNNY though the ratio is even lower.

Overall I see it as a ecosystem bet as well, SBR is the prime venue for stable pairs and these scale well with overall ecosystem TVL. Moreover, the whole “curve wars” are still very much underdeveloped. How it plays out in a nutshell:

  • Liquidity in pools is dependent upon SBR rewards
  • Of the fixed daily emission, the allocation split is decided based on a gauge system where you need locked SBR (veSBR) to vote
  • Stable protocols but in general every protocol that needs to have liquidity (stablecoins are still very hot area of development, see Hubble) will have to find some way to vote in favor of their pools. We saw an example of this recently where MonkeDAO managed to get a large share for their daoSOL-SOL pool and this had a large effect on their total TVL. In the feature this might easily be a make or break for a protocol
  • Protocols can opt to “bribe” holders of veSBR to vote for them as it can be cheaper than buying SBR and locking themselves
  • Another option is to use the governance of Sunny DAO (yet to launch). Sunny has similar dynamics for SUNNY emissions, but more importantly SUNNY has also accumulated a large amount of SBR and, though not announced yet, it looks very likely they will allow SUNNY holders to decide if and how much SBR should be locked, and where the veSBR should be allocated in the Sabergauges

Finally in terms of relative value, let’s take the UST-USDC pool on Sunny. It currently pays 4.5% in SBR + 20% in SUNNY. It has a 16% performance fee so the full SBR yield would be around 5.35%. So I am getting 20% of SUNNY for 0.85% of SBR which at current prices of $0.059 SBR and $0.0087 SUNNY doesn’t seem a bad deal (though of course these are annual rates and prices are very volatile).

Overall I don’t know if the “curve wars” will develop to the same extent on Solana as they did on Ethereum. But it seems like a good ecosystem play and worth owning the tokens if they do. We can also discuss whether we should lock our SBR and for instance vote for the pools where we have liquidity

[INVESTMENT] Purchase token - Saber (SBR)