FIP-11 Proposal to add FXN gauge to USDN/fxUSD

f(x) Protocol Improvement Proposals
1

Introduction

SMARDEX is proposing to add a FXN gauge to USDN/fxUSD. The goal of this proposal is to initially direct incentives to the pair, with the potential for SMARDEX to build a veFXN position. Passing this proposal will enhance liquidity, drive trading volume, and improve LP and voter incentives within the FXN ecosystem.

References & Useful Links

Protocol Description

SMARDEX is a leading DeFi protocol focused on efficient liquidity provision, sustainable stablecoin yield strategies, and smart AMM mechanisms. The project is deeply integrated within the DeFi space, building a next-generation ecosystem around its unique stablecoin architecture.

Recently, SMARDEX introduced USDN, a synthetic dollar that utilizes a delta-neutral strategy. Unlike other tokens of the same type, USDN will be decentralized, and will operate by using SMARDEX’s proprietary perpetual DEX for cash/carry trade operations. USDN leverages yield from LST-backed perps instead of relying on centralized entities or real-world assets. This ensures that USDN remains censorship-resistant and fully on-chain.

To broaden its appeal and user base, SMARDEX is incorporating gaming elements into its ecosystem, particularly through SMARDEX Poker Pro. The project has also formed a strategic partnership with Stake, an online gaming and sports betting platform, offering exclusive bonuses to SMARDEX users. This integration of DeFi, poker, and online gaming, with USDN serving as the stable currency for these activities, seeks to create synergies and expand adoption beyond traditional DeFi spheres into the online gaming and poker communities.

Specifications

  • Governance: USDN is governed by SDEX token holders, with mechanisms in place for future decentralized governance enhancements.
  • Oracles: USDN operates independently of centralized oracles and maintains price stability through its unique market-driven mechanism.
  • Audits: The SMARDEX smart contracts have undergone multiple security audits.
  • Centralization Risks: USDN is fully decentralized, utilizing DeFi-native yield rather than off-chain assets or opaque mechanisms. Minting and Rebasing rights have been renounced.
  • Market History: USDN is preparing for its large-scale launch, backed by established DeFi protocols and a strong community. It has consistently traded at the intended price
2

Hey, thanks for putting this proposal together. It would be helpful to get an idea/commitment on the incentive budget you plan to spend on the pool and the time horizon?

What is your target TVL for this pool?

3

Hi, thanks for your interest.

:one: Incentive Budget & Time Horizon
Our initial commitment is to deploy about 5-7k USD worth of incentives per week to bootstrap liquidity and encourage sustained participation. Depending on performance, market conditions, and engagement from LPs, we are open to adjusting this over time to optimize efficiency.

:two: Target TVL
The incentives budget should generate about 650k in rewards per year, enough to sustain about 3-4M in TVL for the pool at 20% APR.

We’re also open to feedback on optimizing this strategy to align with FXN’s broader goals. Let us know your thoughts!