Proposal: Increase Co-investment Limit to 1M BNT on AMP Pool

This proposal is expected to appear on Snapshot for voting on Monday 19, April 2021 at 12:00 pm UTC.

TLDR

  • This proposal seeks to increase the Co-investment limit to 1M BNT in the AMP pool.
  • It will open up space for LPs on the TKN side (AMP) and potentially lead to an increase in the depth of the pool as LPs add liquidity
  • A larger AMP pool will attract more trades from aggregators and professional market makers to Bancor which ultimately leads to more fees for our platform.

Abstract
There is currently ~41.9K BNT and ~9M AMP tokens in the BNT-AMP pool. This has resulted in a pool that has roughly $611K in liquidity. At the moment, LPs on the TKN side (AMP) can’t provide single sided liquidity since there is no capacity. This proposal is seeking to increase single-sided capacity in the AMP pool by increasing the Co-investment limit to 1M BNT.

Motivation

If we want to attract more AMP LPs to Bancor, we need to open up space in the pool so that they can provide single sided liquidity. This would allow us to grow the liquidity in the pool and attract larger trades towards our platform which ultimately results in higher fees for Bancor.

Since inception, the AMP-BNT pool data shows that it has been in high demand and has filled up completely during certain intervals:

This suggest to me that there is demand for LPs on the AMP side to provide liquidity and we should open up space from our side.

The top pools for AMP are on Uniswap/Balancer/Sushiswap and are paired with ETH/USDC. Cumulative liquidity is roughly 9.39M on other DEXes and we should strive to make the Bancor pool deeper to support larger trades (equates to lower slippage).

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Currently, this pool is filled completely on Bancor and LPs can’t provide single sided liquidity on the TKN side (AMP). I am proposing a 1M Co-investment limit for the AMP pool which should open up roughly 7M in single sided liquidity (assuming BNT price at $7.00). If this pools fills up completely, we would have a pool that’s roughly ~14M in depth.

This pool won’t have too much competition from CEXes since most of the liquidity resides on DEXes

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Note that this pool was whitelisted in Proposal: Whitelist AMP-BNT pool

For

  1. A larger co-investment limit on the pool will let LPs provided single sided liquidity and will lead to an increase in pool depth
  2. More liquidity in the AMP-BNT pool should lead to larger volume from DEX aggregators and professional market makers sent in our direction
  3. More volume for Bancor leads to more fees for our platform and BNT holders

Against

  1. We should not increase the limit on the pool
  2. We do not need extra liquidity in our platform to support larger trades
  3. We do not need to generate fees for our platform or BNT holders
2 Likes

Tagging some folks that have submitted previous threads related to AMP for their awareness. @issabobissa @kk182

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Don’t think this should even be consider until pool is upgraded.

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We shouldn’t block on increasing liquidity across the platform due to owners not upgrading their pools. The swap fees will still benefit us if it brings more volume even if it hasn’t been upgraded yet to have a portion be used for the vortex burner.

With that said, my understanding from the community call was that all pools will come under control of the DAO via a separate proposal. @mbr might be able to provide an update on that proposal and when that will be put for vote.

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What you said might be true. Pesonally won’t support any proposal involving a whitelisted-token that is not upgraded though.

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A valid point. Does anyone know who the pool owner is?

Certainly, this is something we are quickly moving towards. However, I do think that @atosm makes a valid point - let’s prioritize getting the pool upgraded and go from there. We can pull the trigger on this proposal pretty quickly after the new pool contract is deployed.

A superbly constructed proposal, I might add. Thank you for your effort!

Owner appears to be “0x746B250bddFd4b68FDF2D08FF3bF4AE266ed8eAa” per the pool contract. As to who that actually is or how we contact them well…I am not sure.

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Hi all! Firstly, just want to say the Amp team continues to appreciate all the support from the Bancor community! We think it’s a great one :slight_smile:

As far as the pool owner goes, I’ll get in contact with him to upgrade the pool…I think I saw a comment in the Discord before about the team helping out with the gas cost to do so. Is that still a thing?

2 Likes

I am happy to discuss with the owner.

It is easier if they transfer ownership to the foundation, and have the foundation perform the upgrade. Reach out to me on telegram: @MB_Richardson

I am happy to report that the AMP pool will soon be upgraded.

As this was the only issue raised, and which is now resolved, I am moving this to level 2.

3 Likes