This proposal is expected to appear on Snapshot for voting on August 15, 2021 8:00 AM EST. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.
TLDR;
- This Proposal seeks to increase the Co-Investment Limit on the UMA Pool to 500K BNT.
- It will open up space on the TKN side (UMA) and lead to an increase in the depth of the pool as LPs add liquidity.
- A larger UMA pool will attract more trades from aggregators and professional market makers to Bancor which will provide more fees to the platform.
- UMA Has agreed to match part of this co-investment with 500,000 USD worth of UMA.
Abstract
There is currently 35K~ USD In the UMA Liquidity Pool on Bancor. This proposal seeks to increase the co-investment on said pool to 500K BNT, offering enough room for roughly 2M USD worth of space at a 4$ BNT. The UMA Team has graciously agreed to help seed the pool with an initial 500,000$ worth of UMA which comes out to around 50K UMA. With this initial liquidity the pool should have deep enough liquidity to start pulling in trades and generate a good APR. UMA is an incredibly desirable pool.
Motivation
The UMA Pool remains one of the few pools that Bancor has yet to capture the market for. Looking at competing AMMs we can see that the UMA Pair has a large number of LPers with a combined value between the pools of 5.5 Million USD denominated in UMA.
Furthermore, The pair has a very healthy Liquidity to Volume Ratio which makes it a great pair for generating revenue for the platform. A 500K BNT Co-Investment, along with the help of the UMA Treasury, will help us initially match Uniswap’s Liquidity but the ultimate goal remains to dethrone Sushi. After we see this space fill, I see no reason as to why the DAO wouldn’t pass another proposal to beat out the Sushi Pool, but that can be left for another vote.
Benefits to UMAns
After doing a little bit of digging on the pair it is clear that Bancor should be the best place for UMAns to place their tokens. UMAns will receive the great advantage of Impermanent Loss Protection as well as single sided staking. I believe this will resonate strongly with the community since everyone over there is extremely committed to their token. Single Sided Staking will allow the current Sushi UMA LPs to keep or sell their Ethereum for more UMA to have more exposure to their favorite token. And as far as Impermanent Loss, it is better to simply show you exactly what Bancor is protecting you from :
Voting Instructions
FOR
- Open Up Space for 500,000 BNT Worth of UMA.
- UMA Treasury Matched 500,000$ Co-Investment.
- Gain market share of UMA’s great Liquidity and Volume.
- Further Involve ourselves with UMA Community.
AGAINST
- No - I hate Money.
