sINV

Yield-bearing staked INV

sINV, or staked INV, brings the INV governance token to users who do not trade on Ethereum mainnet or who do not use FiRM. sINV also gives users a way to hold INV without the need to manually claim rewards, while creating opportunities to make sINV available in liquidity pools or as loan collateral on third party lending markets.

sINV is a yield-bearing, synthetic token that derives its yield by autocompounding rewards sent to INV stakers on Inverse Finance’s FiRM lending market. Users who stake INV as sINV receive a constant stream of DBR’s, in addition to INV staking rewards, which are continually swapped into more INV, resulting in yield-bearing sINV.

Depositing INV for sINV further incentivizes the long-term holding of INV, creates continuous market buy pressure on INV, and resulting in reduced liquidity costs per circulating INV and improved overall unit economics of the protocol.

sINV Basics

sINV is designed as a tokenized ERC-4626 wrapper around the INV market on FiRM. An XY=K Dutch auction swaps DBR streaming rewards for INV and, along with INV staking rewards, deposits the INV into FiRM and the vault smart contract, leading to the INV:sINV exchange rate to continuously grow. Please note that the INV deposited into sINV do not retain their on-chain governance voting rights.

Minting sINV

The underlying asset for sINV is Inverse Finance’s INV governance token, which is available on Automated Market Makers like Curve or Balancer.

To mint sINV, a user stakes INV in the sINV smart contract, which is a ERC-4626 compliant vault, resulting in a new wrapped token, sINV, on Ethereum mainnet.

Important points about minting sINV:

The sINV token represents pro rata deposits within the ERC-4626 vault and is always withdrawable for INV governance tokens at the pro rata rate.
There is no maximum number of sINV that may be minted by a user depositing INV.
INV staked to mint sINV is never rehypothecated or loaned to third parties.

To stake INV for sINV, simply go to https://inverse.finance/sINV and follow the instructions:

First, select the "sINV" tab on the upper navigation bar:

And select "sINV" in the pulldown menu:

Connect your wallet:

Next, indicate the desired amount of INV to stake as sINV:

Approve the desired amount of INV in your wallet (gas required) and stake your INV to receive sINV in your wallet.

You can keep track of your sINV deposits and earnings (along with INV, DBR, and FIRM borrowing positions) on the dashboard page located at https://www.inverse.finance/dashboard

sINV Yield Accrual

sINV yield is derived from two sources: xINV staking (or “anti-dilution”) rewards and DBR streaming rewards.

xINV Staking Rewards. xINV staking rewards function as a remedy to dilution experienced by INV holders when the DAO mints INV in order to fund liquidity and other DAO operations. Until the release of sINV, xINV staking rewards were available exclusively to INV stakers on FiRM. For both sINV users and INV stakers on FiRM, xINV staking rewards are added automatically to a user’s staking position on a continual basis with each Ethereum block.

DBR Streaming Rewards. DBR streaming rewards function as a revenue sharing mechanism for holders INV stakers. DBR’s are a primary revenue generator for the DAO and are issued to INV stakers who in turn sell them in marketplaces or auctions, primarily to borrowers who need them for DOLA loans on FiRM. Until the release of sINV, DBR streaming rewards were available exclusively to INV stakers on FiRM and required users to manually claim their DBR streaming rewards. With sINV, DBR streaming rewards are automatically swapped for INV via a dedicated XY=K Dutch auction and deposited weekly into the sINV vault with no manual claiming required by the user.

sINV Yield Auto-compounding

A powerful aspect of sINV is the automatic compounding of the continuous DBR streaming rewards yield accrual into additional INV. DBR yield auto-converts to more INV, so a user’s INV balance staked in sINV is continually growing. There is therefore no need to claim DBR reward yield in separate, manual transactions and no human intervention is required by the user or by DAO contributors during the auto-compounding process.

The token flows involved in autocompounding sINV can be illustrated as follows:

To convert DBR yield into more INV for the user, the DBR yield must be first swapped for INV. sINV implements the DAO’s XY=K Auction contract, meaning this will create additional depth to DBR’s market and run in a fully automated manner via Miner Extractable Value (MEV).

The XY=K Auction operates as a virtual, x*y = k constant function market maker auction. The purpose is to provide a market-driven, continuous, Dutch auction for DBR, paid in INV. DBR reserves increase over time, pushing down the price of INV in the auction, until the price is low enough for an arbitrageur to extract profits. Upon a successful trade, the buyer will deposit INV in return for freshly minted DBR. Essentially the contracts function very similarly to a Uniswap V2 pool, except one side of the pair is virtual (INV), and the other (DBR) has a continuous stream of new tokens being added to the reserves.

sINV Yield Distribution

Yield generated from sINV's DBR-INV swaps is allocated to sINV holders on a pro-rata basis over a 7-day period. This distribution cycle is structured on a weekly basis, with weeks starting and finishing at roughly Thursday 00:00 UTC each time. The yield for any given week is derived from auction activities in the preceding week.

This mechanism implies that as the supply of sINV increases, the current yield lags the projected yield, appearing lower. This is because the revenue earned in the previous week was from a comparatively smaller sINV supply than the present distribution base. Conversely, if sINV supply diminishes due to withdrawals, remaining holders experience a temporarily enhanced yield until the current and projected yields align. Importantly, sINV does not have a predefined minimum or maximum APY.

Withdrawing sINV

Users may unwrap their sINV at any time through a conventional un-staking transaction. There is no maturity date, no waiting period to withdraw INV, and users may re-stake into sINV at any time.

Contract Addresses

sINV: 0x08d23468A467d2bb86FaE0e32F247A26C7E2e994

How To Buy sINV

INV can be acquired by using any of the following methods:

Staking INV and receiving sINV on https://inverse.finance/sINV
Buy sINV from a decentralized exchange like Curve

sINV Cross-Chain Bridging

sINV cross-chain support is planned for Q4 2024.

FAQ

What is sINV?

sINV is a yield-bearing version of the DAO’s INV governance token structured as an ERC-4626 wrapper around a INV smart contract that continuously autocompounds both streamed INV staking rewards (via FiRM) as well as streamed DOLA Borrowing Rights (DBR’s) to a single token, sINV.

What are the advantages of sINV?

Convenience. sINV users no longer need to manually claim DBR streaming rewards as they are deposited directly into an sINV vault.
Portability. sINV allows INV holders to enjoy the benefits of INV staking on FiRM while also affording them the ability to hold sINV outside of FiRM and move it across chains, deposit in liquidity pools, or use as collateral on lending markets.
Decentralized yield. sINV departs from other yield-bearing stablecoin products via its sourcing of yield from non-centralized sources. sINV’s reliance on DBR-based yield requires no centralized assets or custodians while INV itself has no third party contingencies or custodians. This contrasts with yield-bearing protocols which largely or entirely derive their yield from centralized or government sources.
No rehypothecation of the underlying governance token. The INV you stake in the sINV contract is never loaned to a third party.

How is the sINV projected APY calculated?

The projected APY is a theoretical estimation of where the APY should tend to go. It's calculated by considering current's week auction revenue and a forecast that considers the DBR incentives, where the forecast portion has a weight of more than 50%, plus the xINV APR.

Can sINV holdersk participate in Inverse on-chain governance?

For now, sINV holders cannot participate in on-chain governance - if you want to continue to vote or delegate you'll need to stay staked on FiRM.

I have had my Inverse staked on FiRM for while, can I still leave it to continue to get rewards or do I need to convert it to sINV?

You can leave it right where it is. One advantage of sINV is that DBR rewards are claimed for you and autocompounded, while with your staked INV position on FiRM you'll need to periodically claim your DBR rewards manually.

Is there a lock period for sINV?

No. Users may unstake and withdraw at any time.

What is sINV v1 vs. sINV v2?

sINV was launched under "guarded mode" in September 2024 in order to limit deposits and reduce risk exposure while allowing the team to monitor and make adjustments during the early stages. This strategy resulted in the detection of a minor issue and the contract was redeployed to safeguard the long-term integrity of the sINV product.

Current sINV stakers can seamlessly migrate from the old to the new sINV via our standard user interface: https://www.inverse.finance/sINV

Steps:

Unstake your sINV from sINV v1 https://www.inverse.finance/sINV
Stake your (unstaked) INV to sINV v2 in order to receive sINV
Your gas costs up to a maximum of 0.01 ETH will be automatically refunded to you by the Treasury Working Group. For questions, please post in the support channel on Discord