Restrict Superfluid pools to a core set of pairings

Proposal Discussion Superfluid Staking
1

This proposal removes superfluid staking on the majority of pools in order to encourage the further migration of liquidity to Supercharged pools as well as align Osmosis security with a minimal selection of core assets.

Superfluid

Superfluid Staking allows a portion of the value within a pool to be staked to secure the Osmosis chain. Approximately 14.3M OSMO are currently staked through superfluid staking, comprising 3.8% of staking security.

Governance has previously preferred that any sizeable OSMO paired pool be added to Superfluid staking to increase the security of the chain and rewards for those pools. Due to the low level of Superfluid usage, OSMO currently receives minimal security benefit from this while maintaining the old standard of 14-day bonding in liquidity pools and encouraging the use of OSMO pairings.

This proposal reviews the current set of Superfluid-enabled pools and would reduce them to a core set due to observed changes in community preference and liquidity provider behavior.

Superfluid Enabled Pools (73)

Pool ID Quote Base TVL Fees Pool Type
1 OSMO ATOM 7,837,608 0.20% Classic
833 OSMO stOSMO 7,294,090 0.30% Classic
1135 OSMO ATOM 4,269,943 0.20% Supercharged
1093 OSMO AKT 2,420,588 0.20% Supercharged
1134 OSMO ETH 2,086,815 0.20% Supercharged
712 OSMO WBTC.axl 1,432,587 0.20% Classic
1090 OSMO WBTC.axl 1,371,530 0.20% Supercharged
704 OSMO ETH 1,315,333 0.20% Classic
812 OSMO AXL 1,161,446 0.20% Classic
678 OSMO USDC.axl 855,832 0.20% Classic
1133 OSMO USDC.axl 789,423 0.20% Supercharged
1248 OSMO TIA 730,726 0.20% Supercharged
681 OSMO FET 703,386 0.30% Classic
1094 OSMO AXL 628,258 0.20% Supercharged
3 OSMO AKT 475,727 0.20% Classic
9 OSMO CRO 418,664 0.20% Classic
1095 OSMO SCRT 403,389 0.20% Supercharged
725 OSMO INJ 402,633 0.20% Classic
1263 OSMO USDC 378,981 0.05% Supercharged
806 OSMO STRD 375,094 0.20% Classic
840 OSMO BNB 351,195 0.20% Classic
1096 OSMO STARS 304,059 0.30% Supercharged
584 OSMO SCRT 262,285 0.20% Classic
1098 OSMO STRD 256,750 0.20% Supercharged
722 OSMO EVMOS 255,365 0.20% Classic
1265 OSMO ATOM 253,634 0.05% Supercharged
1097 OSMO JUNO 240,339 0.30% Supercharged
1464 OSMO USDC 234,961 0.01% Supercharged
1092 OSMO CRO 228,478 0.20% Supercharged
604 OSMO STARS 164,200 0.30% Classic
497 OSMO JUNO 156,536 0.30% Classic
1400 OSMO ATOM 142,634 0% Supercharged
1104 OSMO BLD 101,721 0.20% Supercharged
1281 OSMO ETH 93,897 0.05% Supercharged
789 OSMO MATIC 93,163 0.20% Classic
674 OSMO DAI 91,024 0.20% Classic
1066 OSMO DAI 87,562 0.20% Supercharged
1399 OSMO ATOM 73,762 0.01% Supercharged
1077 OSMO USDT 72,747 0.05% Supercharged
899 OSMO AVAX 72,554 0.20% Classic
1103 OSMO SOMM 72,232 0.20% Supercharged
605 OSMO HUAHUA 71,519 0.20% Classic
1099 OSMO MARS 70,761 0.20% Supercharged
907 OSMO MARS 67,175 0.20% Classic
1111 OSMO HUAHUA 65,977 0.20% Supercharged
1221 OSMO USDC 54,540 0.20% Supercharged
42 OSMO REGEN 49,799 0.20% Classic
1101 OSMO XPRT 44,192 0.20% Supercharged
1088 OSMO IST 43,531 0.20% Supercharged
15 OSMO XPRT 40,100 0.20% Classic
1105 OSMO KAVA 39,323 0.20% Supercharged
1434 OSMO WBTC 35,364 0.01% Supercharged
900 OSMO FTM 32,736 0.20% Classic
1477 OSMO ETH 32,254 0.01% Supercharged
627 OSMO SOMM 29,340 0.20% Classic
1249 OSMO TIA 28,047 0.20% Classic
773 OSMO moonbeam.DOT.axl 26,793 0.20% Classic
1091 OSMO moonbeam.DOT.axl 26,465 0.20% Supercharged
1100 OSMO ION 25,361 0.50% Supercharged
837 OSMO IST 13,069 0.20% Classic
1011 OSMO ARB 12,276 0.20% Classic
463 OSMO NGM 11,697 0.30% Classic
831 OSMO USDT.axl 11,373 0.20% Classic
1013 OSMO ION 9,683 0.50% Classic
795 OSMO BLD 9,676 0.20% Classic
1347 OSMO TIA 7,853 0.05% Supercharged
730 OSMO KAVA 6,477 0.20% Classic
1433 OSMO WBTC 4,917 0.05% Supercharged
1430 OSMO WBTC.axl 795 N/A Supercharged
1432 OSMO WBTC 49 N/A Supercharged
1076 OSMO USDT 31 N/A Supercharged
1369 OSMO USDC 22 N/A Classic
1465 OSMO USDT 15 N/A Supercharged

Proposed Changes

Remove Non-Supercharged pools from Superfluid

This suggestion follows Proposal 774 where Osmosis incentives were removed from Classic pools.

With Supercharged pools being live for a year, active liquidity in Classic pools should have fully migrated and is likely to continue to exist without receiving the additional rewards from Superfluid staking.

This also includes the stOSMO/OSMO pool as a stableswap, which has been far outperformed by the stOSMO/OSMO Concentrated liquidity pool backed by protocol-owned liquidity. Superfluid positions in both of these pools underperform compared to staking but have the full bonding period.

Removing this set of pools will remove 35 pools from being Superfluid enabled, which will encourage active liquidity providers in Classic pools to migrate to equivalent or more concentrated positions within Supercharged pools.

Remove Non-Quote assets

This suggestion follows Proposal 638, which restricted incentives to a minimal list of assets, mostly quote assets at the time.

This concentrates the Superfluid provided security to current quote assets of:

  • USDC via Noble
  • DAI via Axelar
  • WBTC issued on Osmosis
  • WBTC via Axelar
  • ETH via Axelar
  • ATOM
  • TIA

This removes 20 pools from being Superfluid enabled.

The main benefit is that minimizing emissions to these pools encourages liquidity to form alternative pairings, such as with USDC or BTC, which helps to diversify and strengthen the Osmosis ecosystem while having minimal impact on Osmosis security. This approach also helps to de-couple the performance of ecosystem tokens from OSMO itself, addressing a commonly raised concern by ecosystem participants and leaving the maintenance of these pairings entirely to liquidity provider preference of volatility expectations.

Proposed Superfluid Pools to Retain (18)

Pool ID Quote Base TVL Fees Pool Type
1135 OSMO ATOM 4,269,943 0.20% Supercharged
1134 OSMO ETH 2,086,815 0.20% Supercharged
1090 OSMO WBTC.axl 1,371,530 0.20% Supercharged
1248 OSMO TIA 730,726 0.20% Supercharged
1263 OSMO USDC 378,981 0.05% Supercharged
1265 OSMO ATOM 253,634 0.05% Supercharged
1464 OSMO USDC 234,961 0.01% Supercharged
1400 OSMO ATOM 142,634 0% Supercharged
1281 OSMO ETH 93,897 0.05% Supercharged
1066 OSMO DAI 87,562 0.20% Supercharged
1399 OSMO ATOM 73,762 0.01% Supercharged
1221 OSMO USDC 54,540 0.20% Supercharged
1434 OSMO WBTC 35,364 0.01% Supercharged
1477 OSMO ETH 32,254 0.01% Supercharged
1347 OSMO TIA 7,853 0.05% Supercharged
1433 OSMO WBTC 4,917 0.05% Supercharged
1430 OSMO WBTC.axl 795 0.01% Supercharged
1432 OSMO WBTC 49 0.20% Supercharged

Target Onchain Date: 8th July 2024

1 Like
2

Hi!
Could you elaborate on what criteriums were used to determine the list of 18 retained superfluid pools? Has the active liquidity in classic pools fully migrated?

3

They’re the assets that are currently “Quote” assets on Osmosis which are those that supercharged pools can be created with. While we could probably keep things like AVAX/OSMO since AVAX is independent of OSMO price action it seems best to keep this to a very small set and focus on improving the security that we get from the most prominent tokens such as BTC and ETH.

There are also a couple of borderline removals here - USDT.kava was just replaced by allUSDT as a quote asset, so there is a removal, but no allUSDT/OSMO superfluid onboarded yet. And USDC.axl is removed despite being a quote asset until recently - but this is part of encouraging migration to Noble native USDC.

Since Supercharged launched a year ago, there has been a prompt to migrate. The Classic pools no longer receive additional incentives. If a user is active, there is no reason for them to not have migrated their position to a Supercharged pool by now. However, this hasn’t been confirmed within the data.

1 Like
4

I agree on just having the clear list of assets which are added for Superfluid.

Is there an estimate of the amount of staked OSMO which will disappear? Or is that not visible?
Will this also have a beneficial effect on the epoch because the calculations are done for lesser pools?

5

Hmm, it may have an impact on epoch, however I wouldn’t think it would be huge.

I don’t have the data extracted, but I would think most of that 14M would be unstaked since if inactive users were 14-day bonded for incentives in the old classic pools, there was no reason not to also be superfluid-staked.

6

Unless it is real set-and-forget liquidity which has been put in once and never looked at it again :stuck_out_tongue:

But, we are thus talking about 3-4% which is potentially unstaked maximally.
Sounds like a risk we can take (as long as the stake is not removed from my validator hahaahaha)

1 Like