Proclamation SIP: Proposal to Rootstock / IOVLabs: Start-up aid for Zero and Babelfish

Hello Sovryns,

SIPs can not only be used to make changes to the code base. SIP’s can also be seen as a vote and poll of the Sovryn Bitocracy to publish statements and proclamations. This is one such SIP.

Sovryn would like to awaken Zero from its long hibernation. Sufficient liquidity is important for this - in and out of the Rootstock economy. The main problem here is getting stablecoins out of rootstock. This is only possible in sufficient quantities with btc and not with stablecoins. This imbalance leads to problems with the $DLLR peg.

With the Incentive Curves, Babelfish has developed a promising system that could be the solution. It has been shown that the system works well. Now it is time to take the next step.

According to analyses by Babelfish, providing the Incentive Curves with rewards of $50,000 would result in an inflow of $2,000,000 in stablecoins into the Rootstock ecosystem. This would provide enough bridge liquidity to awaken Zero and strengthen large parts of the Rootstock ecosystem.
If this SIP achieves a majority, Sovryn would like to make the following statement:

“This is a request and plea from the Sovryn community to IOVLabs/Rootstock: Please provide Babelfish with $50,000 for the incentive curves reward mechanism. We believe this can be a great benefit for the whole ecosystem and will significantly increase the use of the rootstock sidechain.”

If you would like this SIP to be put to the vote, please delegate VP to the following address.



Completely agree with Sacro on the importance of defending and promoting the performance of Babelfish incentive curves by providing them with additional funds for rewards.

We know from FrenchVictory that there is an undetermined amount, between 100 and 200k dollars, that IOV Labs would provide for marketing campaigns targeted at trading competitions with specific objectives. There are ongoing discussions and negotiations, but nothing has been finalized as far as we know.

I strongly suggest directing a portion of those resources towards funding rewards for BabelFish curves. In any case, a shared effort with IOV Labs and Sovryn can be discussed to demonstrate the commitment of both parties.

Personally, I would love to participate in trading competitions, but perhaps it is more important to release Zero first.


This SIP-Proposal has gathered enough VP to be put up for vote next week. I’ll leave two more days for discussion/improvements. If you have suggestions for additional argumentation/wording please leave it here. This SIP goes to vote early next week.


I would just say that it would be good to elaborate on the analysis that shows how $50K can attract $2M or provide a link to that analysis.


I think @Hyde can offer this analysis.

This proposal is now live. I noticed that there is a technical issue on preventing the proposal from being rendered properly. Several people have alerted the Sovryn frontend devs about this. Now we are waiting for an ETA on the fix. If I were a voter in this situation I would abstain from voting unless I was able to independently confirm the contents of the proposal by checking the blockchain directly, or using an alternative frontend that I knew was functioning properly. But of course this is a decision for every voter to make for themselves.

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You have my VP and it is something we actually need.

Sovryns, please do not vote on the current SIP that is live. There’s an issue that prevents the front-end from showing the content of the SIP.

Once the vote is over, i’ll try to resubmit the SIP via the old dapp and hope that this will work.

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I suggest adding to the wording of the proclamation in addition to the Babelfish analysis a wording that would indicate some kind of deadline to execute and to respond. For example Jan 2024 to execute, and two weeks to provide an official response.

I also suggest that thought will be given on how this will be communicated to Rootstock. email? tweet? who’s tagged.

The community could open a @Sovryns tweeter profile for example.


At BabelFish Money Protocol, we’ve been actively developing innovative solutions to tackle challenges related to stablecoin liquidity. We firmly believe that the stability and availability of stablecoins are paramount in DeFi, particularly during challenging market conditions. Establishing proper stablecoin allocations within the BabelFish aggregator has been a challenge. Still, with the introduction of Balancing Curves – a mechanism designed to maintain healthy stablecoin allocations, encourage diverse stablecoin deposits, and penalize deviations from target weights – we are making strides toward achieving equilibrium.

First part of the this analysis covers the period between September 26th and October 10th, 2023.

On September 26th, the Reward Manager was subsidized with 10,000 XUSD.

Target weight 26.09.2023 Actual weight 10.10.2023 Actual weight Change
DLLR 49% 3,060,436.06 95.58% 2,633,260.50 82.96% -427,175.56
DOC 0.50% 56,109.34 1.75% 291,664.17 9.19% 235,554.83
rUSDT 5% 31,936.94 1.00% 114,718.34 3.61% 82,781.40
USDTes 5% 22,073.67 0.69% 85,412.46 2.69% 63,338.79
USDCes 5% 17,985.99 0.56% 29,109.56 0.92% 11,123.57
USDTbs 15% 12,656.72 0.40% 19,389.39 0.61% 6,732.67
DAIes (DAIes) 5% 350.31 0.01% 350.31 0.01% 0.00
USDCbs 5% 277.35 0.01% 317.80 0.01% 40.44
BUSDbs 5% 1.53 0.00% 1.53 0.00% 0.00
DAIbs 5% 1.00 0.00% 1.00 0.00% 0.00
RDOC* 0.50% 0.96 0.00% 0.96 0.00% 0.00
Total 3,201,829.86 3,174,226.02 -27,603.85
Reward Manger 10,000.00 158.67

*Deposits paused.

Deposits Rewards
DOC 235,554.83 5,888.87
rUSDT 82,781.40 2,069.54
USDTes 63,338.79 1,583.47
USDCes 11,123.57 278.09
USDTbs 6,732.67 168.32
USDCbs 40.44 1.01
Total 399,571.71 9,989.29

DLLR withdrawals surpassed the aggregated stablecoin amount by 27,604.85 during the observed period. Withdrawals of stablecoins that significantly exceed the target weight are neither penalized nor rewarded, although they contribute to aligning actual weights with the target weights. Only deposits of stablecoins below the Target Weight can earn rewards if there are enough funds in the Reward Manager.

The majority of deposits were made with DOC, which not only drained the most rewards but also significantly exceeded its target weight. Despite this, there are still rewards possible for DOC deposits (currently at 2.33% level). Balancing Curves don’t prevent rewards for deposits that exceed target weights in a situation of significant imbalance.

Approximately 5,888.87 XUSD were consumed as rewards for DOC deposits.

All other deposits, aside from DOC, totaled 164,016.88, with 4,100.42 XUSD provided as rewards for those deposits.

Between September 26th (subsidy) and October 10th, 2023, approximately 147.96 XUSD in fees were collected into the Reward Manager.


  • Implementing a feature that restricts rewards for stablecoin deposits exceeding the Target Weight is necessary. This measure would prevent the utilization of funds from the Reward Manager to incentivize deposits of stablecoins surpassing the Target Weight, allowing for a more efficient allocation of funds towards incentivizing deposits that are still below the Target Weight. Such behavior of the Balancing Curves would become a non-issue with allocations closer to the Target Weight, but adding this feature will ensure optimal incentive distribution.

  • With the Balancing Curves Parameter of Max Reward set to 2.5%, each 1 XUSD in the Reward Manager would yield a reward for a deposit of $40 worth of stablecoins.

Having 50,000 XUSD in the Reward Manager would facilitate the incentivization of at least $2,000,000 worth of stablecoins.

  • It is essential to consider the behavior of Balancing Curves, the incentive for deposits below the Target Weight, and the imbalance fee applied to withdrawals that move stablecoin allocations further from the Target Weight. As stablecoin allocations approach the Target Weights, these incentives and fees would naturally diminish. While warranted, there might be a need to temporarily adjust another Balancing Curves Parameter - Factor (C) - to maintain attractive incentives for stablecoin deposits, ultimately leading to deeper stablecoin liquidity.

Analysis of the stablecoin liquidity in the BabelFish aggregator after 10th October 2023.

Target weight 26.09.2023 Actual weight 10.10.2023 Actual weight 03.11.2023 Actual weight 06.11.2023 Actual weight 28.11.2023 Actual weight Deviation from TW
DLLR 49% 3,060,436.06 95.58% 2,633,260.50 82.96% 2,340,360.12 74.61% 2,585,834.44 82.29% 1,808,420.37 67.60% 18.37%
DOC 0.50% 56,109.34 1.75% 291,664.17 9.19% 471,166.56 15.02% 475,369.36 15.13% 475,820.47 17.80% 17.23%
rUSDT 5% 31,936.94 1.00% 114,718.34 3.61% 186,240.69 5.94% 288.17 0.01% 220,111.80 8.13% 3.20%
USDTes 5% 22,073.67 0.69% 85,412.46 2.69% 45,263.82 1.94% 2,275.71 0.07% 565.31 0.02% -4.98%
USDCes 5% 17,985.99 0.56% 29,109.56 0.92% 60,743.84 1.03% 32,193.08 1.02% 96.23 0.00% -5.00%
USDTbs 15% 12,656.72 0.40% 19,389.39 0.61% 32,193.08 1.44% 46,058.90 1.47% 112,805.65 4.00% -10.80%
DAIes 5% 350.31 0.01% 350.31 0.01% 350.31 0.01% 350.31 0.01% 441.97 0.02% -4.98%
USDCbs 5% 277.35 0.01% 317.8 0.01% 11.381 0.00% 11.38 0.00% 16,048.90 0.59% -5.00%
BUSDbs 5% 1.53 0.00% 1.53 0.00% 1.53 0.00% 1.53 0.00% 1.53 0.00% -5.00%
DAIbs 5% 1 0.00% 1 0.00% 1 0.00% 1 0.00% 50,014.89 1.85% -3.14%
RDOC* 0.50% 0.96 0.00% 0.96 0.00% 0.96 0.00% 0.96 0.00% 0.96 0.00% -0.50%
Total 3,201,829.86 3,174,226.02 3,136,333.28 3,142,384.85 2,684,328.09
RM 10,000.00 158.67 20.05 8,273.51 0

*Deposits paused.

Between October 10th, 2023, and November 6th, 2023, the composition of stablecoin baskets within BabelFish Aggregator showed further improvement, despite the absence of significant rewards or occasional incentives. This can be attributed to the increased demand for Sovryn Dollar (DLLR).

Before November 6th, the quantity of DLLR was gradually and consistently decreasing, while the quantity of various stablecoins was on the rise.

On November 6th, a user deposited 253,684.03 DLLR into the BF aggregator. Subsequently, they withdrew 186,728.14 rUSDT, incurring a 5,756.39 XUSD imbalance fee. Following that, the user withdrew 57,218.44 USDTes and paid a 2,275.56 XUSD imbalance fee. This led to a net inflow of 8,031.95 XUSD, collected by the Balancing Curves Reward Manager, along with other smaller inflows.

Although there was a reduction of approximately 777k DLLR, 1.7k USDTes, and 32k USDCes, there were notable inflows of approximately 220k rUSDT, 67k USDTbs, 92 DAIes, 16k USDCbs, and 50k DAIbs. In total, there was an inflow of $352,713.45 worth of external stablecoins and an outflow of $33,807.25 worth of external stablecoins. The imbalance fee collected by the Reward Manager on November 6th alone resulted in an inflow of $312,278 worth of external stablecoins.


The SIP is now up for vote!

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