There is one demand that keeps coming up in the Tornado Cash community, an opportunity to Stake TORN to get rewards. Some of you have been proposing to achieve this with a TORN anonymity mining program. While it is possible, I think there is not enough privacy demand for the TORN token to justify the creation of a new anonymity pool. In market cap terms, TORN is small compared to other major assets like ETH, DAI, or WBTC.
A better and simpler alternative would be to setup a Uniswap ETH/TORN LP staking pool using the battle tested Synthetix staking contract. The staking pool would distribute TORN reward coming from the governance treasury. In DeFi, this is commonly known as the pool 2 strategy.
TORN liquidity are very thin, a $30k swap currently causes more than 2% slippage. As a consequence, it is hard to enter any sizable TORN position.
I personally used to have mixed feelings about a pool 2 for TORN. But after putting things into perspective, the Tornado cash governance treasury have 55% of the TORN supply vested over 5 years. This is about 5.5 million TORN of which 275k have already vested and can be spent now by governance. Every month, an additional 91666 TORN is made available (vesting contract). For comparison, the current TORN circulating supply is 558k. We could leverage this treasury to boost TORN liqduity.
If there is a strong support for this, I could put together a proposal for making it happen.
If the above passes, we should decide an amount of TORN token to distribute.
And finally, we should decide over how much time to distribute these rewards.
- 4 months
- 5 months
- 6 months
- 7 months or more
Update: Adding a poll on what AMM to use