Create & Incentivize USDT0 Pools on SaucerSwap V2

[SMG]

Title: Create & Incentivize USDT0 Pools on SaucerSwap V2

Author(s): HBANK

SaucerSwap Voting Interface: TBA

Related Discussions: None

Submission Date: 2026-03-16

Summary

This proposal recommends creating two new liquidity pools on SaucerSwap V2: USDT0/HBAR and USDT0/USDC, and redirecting existing LARI rewards from legacy USDT[hts] pools to incentivize these new markets. The objective is to support the adoption of USDT0, the omnichain implementation of USDT powered by Tether and LayerZero that recently launched on Hedera. By reallocating existing incentives rather than introducing new emissions, SaucerSwap can bootstrap liquidity for the new asset while maintaining the current reward budget. Establishing these pools early positions SaucerSwap as the primary venue for USDT0 trading on Hedera.

Motivation

What is USDT0?

USDT0 is an omnichain implementation of USDT powered by LayerZero infrastructure and backed by Tether. It is designed to enable seamless liquidity movement across supported blockchains while maintaining fungibility of the underlying stablecoin. By leveraging omnichain messaging infrastructure, USDT0 allows users to move USDT liquidity across multiple chains with minimal friction and reduced bridging complexity.

USDT0 recently launched on Hedera, creating an opportunity for cross-chain capital from more than 24 supported networks—including Ethereum and Solana—to access the ecosystem.

Why add these pools now?

Stablecoin liquidity is a foundational component of DeFi markets. For cross-chain assets such as USDT0 to gain adoption, they must have reliable and liquid trading venues within the destination ecosystem.

By launching dedicated USDT0 liquidity pools on SaucerSwap, the protocol can establish itself as the primary liquidity hub for USDT0 trading on Hedera. Incentivizing these markets early encourages liquidity providers to supply capital and ensures efficient trading routes for users bridging USDT0 into the network.

Why reallocate existing incentives?

Current LARI rewards incentivize USDT[hts]/HBAR and USDT[hts]/USDC[hts] pools. While these pools supported earlier stablecoin liquidity on Hedera, the introduction of omnichain USDT infrastructure presents an opportunity to align incentives with emerging cross-chain liquidity standards.

Redirecting existing rewards toward USDT0 pools enables the ecosystem to support the new asset without increasing total emissions.

Specification

Target Pools (V2)

Create the following SaucerSwap V2 pools:

• USDT0 / HBAR
• USDT0 / USDC

Both pools will operate on SaucerSwap V2 and serve as the primary liquidity venues for USDT0 trading within the Hedera ecosystem.

Fee Tier

The proposed fee tier for both pools is: 0.05%

This tier is commonly used for stablecoin and major asset pairs where deeper liquidity and tighter spreads are expected.

Incentive Reallocation

This proposal reallocates existing LARI SAUCE emissions currently assigned to the following pools:

• USDT[hts] / HBAR
• USDT[hts] / USDC[hts]

Under this proposal:

• The LARI rewards currently allocated to USDT[hts]/HBAR will be redirected to USDT0/HBAR.
• The LARI rewards currently allocated to USDT[hts]/USDC[hts] will be redirected to USDT0/USDC.

No additional rewards emissions are introduced. The proposal only redirects existing incentive allocations.

Activation

Upon ratification

• Create the USDT0/HBAR and USDT0/USDC SaucerSwap V2 pools.

At the start of the next epoch

• Redirect the existing LARI rewards allocations from the legacy USDT[hts] pools to the new USDT0 pools.

No other reward streams are modified by this proposal.

Rationale

This proposal aims to align SaucerSwap’s liquidity incentives with emerging cross-chain liquidity infrastructure.

Several factors support this transition:

Cross-chain liquidity expansion
USDT0 enables liquidity to move into Hedera from a wide range of blockchain networks including Ethereum and Solana.

Stablecoin market development
Deep stablecoin liquidity is critical for DeFi growth. Establishing USDT0 trading markets improves price discovery and capital efficiency for stablecoin flows entering the ecosystem.

Protocol positioning
By supporting USDT0 liquidity early, SaucerSwap can position itself as the primary venue for omnichain stablecoin trading within Hedera.

Emission neutrality
This proposal does not increase SAUCE emissions. Instead, it reallocates existing incentives toward liquidity pools that are expected to play a larger role in cross-chain stablecoin activity.

Benefits (Pros)

• Encourages early adoption of USDT0 within the Hedera ecosystem
• Enables cross-chain liquidity inflows from 24+ supported networks
• Establishes SaucerSwap as a key trading venue for omnichain stablecoins
• Maintains the current SAUCE emissions budget
• Improves liquidity routes for stablecoin trading and DeFi integrations

Downside (Cons)

• Liquidity may temporarily fragment during the transition from USDT[hts] pools to USDT0 pools
• Liquidity providers in legacy pools may need to migrate positions
• Adoption of USDT0 depends on broader ecosystem usage and cross-chain infrastructure reliability

Voting

YES — Approve

Create the USDT0/HBAR and USDT0/USDC SaucerSwap V2 pools upon ratification and redirect the current LARI SAUCE emissions from USDT[hts]/HBAR and USDT[hts]/USDC[hts] to the new pools at the start of the next epoch.

NO — Reject

Do not create the new pools and retain the current incentive allocations for the legacy USDT[hts] pools.

ABSTAIN

Register neutrality without affecting the final outcome.

[CarlosRevilla]

I support this proposal.

Redirecting existing incentives to USDT0 pools is a smart move that aligns SaucerSwap with the new cross-chain liquidity infrastructure coming to Hedera. Launching USDT0/HBAR and USDT0/USDC early helps position SaucerSwap as the main venue for USDT0 trading while keeping emissions unchanged.

A simple and efficient step to support future liquidity inflows. Voting YES.

[H-Barbara]

Just to get into the details.

How much liquidity is going to be used to initialize the liquidity pools?

And just to be explicitly clear, you are proposing for the entire LARI rewards from the previous pools mentioned to the new liquidity pools? Writing out the weight changes were make it much clearer for everyone.

I’d definitely would prefer some gradual shift based on the amount of liquidity that actually moves over. It be very lame of no liquidity does move over and a couple of insiders just get rewarded relatively a lot of rewards for little liquidity.

[SMG]

Thanks for the thoughtful feedback — really appreciate you taking the time to go into the details here.

From HBANK’s side, we’d be able to initially supply ~$5K in liquidity to the USDC/USDT0 pool, which we’re already using to help seed our Hedera ↔ Arbitrum USDC bridge. If we secure additional funding (e.g. from the Apex Hackathon), we would be able to scale that contribution further.

We’re also currently in discussions with other Tier 1 teams in the Hedera ecosystem, as well as private investors, who understand that USDT0 adoption effectively opens the door to scalable stablecoin liquidity inflows. Unlike traditional bridge-based assets, where liquidity is constrained by bridge TVL, USDT0 removes that bottleneck — which is a key reason we believe this is an important direction for the ecosystem.

On that note, we’d also love to explore whether SaucerSwap would be open to supporting this initiative more directly — for example by:
• Adding USDT0 routes to the bridge interface
• Potentially helping seed initial liquidity
• Expanding awareness to the broader community

We believe this would be a strong net positive for both users and protocols across Hedera.

Regarding emissions, totally agree on the need for clarity and a measured approach. We’re open to structuring this as a gradual reallocation based on actual liquidity migration and usage, rather than an immediate full shift. To propose specific weights, we’d first need to better understand the current distribution across pools — but our main objective remains the same: incentivize meaningful USDT0 adoption and integration within the Hedera ecosystem.

Happy to iterate on structure and details here — appreciate the collaboration.

[Larry]

Supportive overall, but I’d suggest keeping USDT0/USDC at 0.05% and setting HBAR/USDT0 at 0.15%. HBAR/USDT0 carries the volatility and inventory risk of a directional pair and likely needs a higher fee tier to better compensate LPs. That would also be consistent with the existing HBAR/USDC 0.15% treatment on V2.