This proposal is expected to appear on Snapshot for voting on 2021-06-21T12:00:00Z
BancorDAO Whitelist Proposal : Whitelist LQTY
TL;DR
- Proposal to whitelist LQTY.
- Proposed co-investment is 150,000 BNT to match the size of LQTY Uniswap pool
- There are no apparent security concerns that would prohibit whitelist status.
- There is no reason to doubt the legitimacy of Liquity Protocol.
- The benefit to Bancor is clear.
LQTY token address: 0x6dea81c8171d0ba574754ef6f8b412f2ed88c54d
Project Website: https://www.liquity.org/
Project
Liquity is a decentralized borrowing protocol that allows users to draw interest-free loans against Ether as collateral (akin to MakerDAO). Loans are paid out in LUSD (USD-pegged stablecoin) and need to maintain a minimum collateral ratio of 110%. Loans are secured by the Stability Pool, where users can deposit LUSD and provide up-front capital to offset uncollateralized debt. In return, they receive ETH collateral when liquidations occur and continuous LQTY rewards (our secondary token).
In addition to Liquity’s focus on capital-efficiency, the protocol is also fully decentralized. Liquity contracts have no admin keys and will be accessible via multiple interfaces hosted by different Frontend Operators, making it censorship resistant. The protocol is also governance-free, as all operations are algorithmic and fully automated, and protocol parameters to maintain system health were set at time of contract deployment.
After launching on April 5th, 2021, Liquity now has $3B total value locked within the protocol.
Token Distribution
100,000,000 LQTY were minted at genesis, and are allocated as follows:
35.3% to the Liquity Community: 32M allocated to the Stability Pool and frontend operators, ~1.3M to reward Uniswap ETH/LUSD LPs (ended), 2M to the Community Reserve which is used to fund grants, hackathons, events, and other community-focused efforts.
23.7% to Team and Advisors: ~24M allocated to current and future Liquity AG employees/advisors, which are all under a 1 year lockup and are 1/4 vested after 1 year of engagement, then 1/36 every month after.
33.9% to Investors: ~34M allocated to Liquity’s early investors who supported our vision and provided the runway necessary for us to succeed long term - 1 year lockup period.
6.1% to Liquity AG Endowment: ~6M allocated to Liquity AG for use by the company - 1 year lockup period.
1% to Service Providers: ~1M LQTY allocated to service providers who helped Liquity in various ways before launch - 1 year lockup period.
Tokenomics
Liquity’s native token, LQTY (ERC20), is used as a reward mechanism within the Liquity ecosystem as stated previously. Furthermore, LQTY can be staked to capture 100% of protocol fees (paid in LUSD & ETH) with no additional risks added such as token slashing to backstop the system. Since launch on April 5th, stakers have been paid $12.6M in protocol revenue.
Community and Communication
Liquity is mainly active on Discord, but we do have an announcement-only Telegram and Reddit. The Liquity team also operates official Twitter and YouTube accounts. Activity on GitHub is frequent, with new updates usually appearing on a daily basis. The Liquity team, advisors, and partners are present on the Liquity website. Robert Lauko, the Founder and CEO of Liquity AG, is the project’s main spokesperson. The Liquity website includes a mailing address in Switzerland, and one contact e-mail.
Mailing: Untere Raintrasse 64, 6340 Baar, Switzerland
Contact: [email protected]
Available Audits
Liquity has been audited four times this year (2021), by reputable auditors:
- Trail of Bits Security Assessment (Jan 2021)
- Audit by Coinspect (March 2021)
- Trail of Bits Liquity Protocol and Stability Pool Final Report (March 2021)
- Trail of Bits Liquity Proxy Contracts Report (March 2021)
- Liquity also maintains an open bug bounty program.
Market and Trading Data
- LQTY’s price at the time of writing is $7.34
- All-time high: $73.18 (April 5th, 2021 - first day of launch)
- All-time low: $6.60 (June 17th, 2021)
- 4,878,856 tokens in circulation
- 100,000,000 maximum supply.
- The current market capitalization is $35,831,645
- The 24-hour spot volumes range from $400,000 to >$1,000,000.
Benefits for Bancor:
As of right now, the majority of earned LQTY makes its way to Liquity’s staking contract because being an LP on Uniswap seems to be less favorable at the moment. However, a Bancor whitelisting with impermanent loss protection and a potential opportunity for LM rewards could encourage existing Uniswap LPs for LQTY to migrate and could convince some LQTY holders to leave the staking pool in order to provide liquidity — making Bancor a primary hub for LQTY liquidity and volume. The team and community could also help spread awareness around the pool if approved, attracting new users to the Bancor ecosystem.
