[RFC] Designing a new major liquidity program

Summary

A request for comments on the design proposal for a new liquidity program.

Component Summary

  • [10-50x liquidity]: Increases liquidity in DEX by at least 10 times, ideally 50 times, from current values.
  • [Audited contracts]: By using audited contracts, we skip security audits for liquidity programs.
  • [Requesting suggestions]: This RFC has no design and seeks design suggestions from everyone in the DEV community.

Motivation

For DEV tokens to penetrate more creators and their ecosystems, the high accessibility of DEV tokens is fundamentally required. The main access route for DEV tokens is Uniswap, and it’s DEX. Of course, in the not too distant future, the protocol will also need accessibility in CEX. Still, we need a decentralized foundation, and the protocol cannot realistically incorporate CEX-dependent liquidity improvements into the plan.

Details

Uniswap is the main pool of DEV tokens, with a deposit of approximately 150K DEV. The new liquidity program aims to achieve a deposit of 1.5M to 7.5M DEV in pools that implement AMM (Automated Market Maker).

The new liquidity program needs to be an audited contract and stress-tested on the Ethereum mainnet whenever possible.

We seek the following suggestions to grow the pooled DEV from about 150K to 1.5M ~ 7.5M.

  • [Best pools]: Pair with WETH? DAI, or USDC? Or?
  • [Best contracts] Which contract(s) should we use for the new liquidity program?
  • [Rewards] How many DEV tokens should we offer as rewards? For example, “If we want to present 50% APY for 1.5M liquidity, we need 750K DEV”.

Agreed Collaborators

None

Missing Roles

Liquidity program designer

Compensation

If you need a reward, it can be allocated from the DEV ecosystem fund through community voting.

References

None

4 Likes

I think that we have to keep in my that the appreciation of the pool itself will bring those values up, if they’re in $.

Some community members have recommended Visor, for the management of a V3 pool, everything should be automatic and balanced between pools.

I think that just a huge apy% won’t increase the liquidity 10x, with the current constant price. We need to appreciate the value of the token/pool while improving the liquidity incentives. A CEX would be good not because of it’s liquidity or their liquidity impact, it’s just that it’d probably increase demand for the token, dexs are huge barriers. This could indirectly increase the value of the pool.

Just like a regular economy, we need ‘structural reforms’(fiscal) so that we can afford lower interest rates. Really high interest rates can have a negative impact on the project functioning. So imo we have to keep pushing for innovation, integrations, CEXs, etc. While keeping a significant incentive for liquidity. But, I don’t think that an absurd APY% for liquidity, just for the sake of liquidity, is healthy.

1 Like

Bankless have just put a valuable post together on liquidity provision. Worth a read guys:

2 Likes