This proposal is expected to appear on Snapshot for voting on Monday 19, April 2021 at 12:00 pm UTC.
- This proposal seeks to increase the co-investment limit to 1m BNT in the MTA pool
- It will open up more opportunities for LPs from MTA holders, increasing the depth of the pool as LPs add liquidity, creating a deep liquid market for MTA with single-sided token exposure and impermanent loss protection thanks to Bancor v2.1
- A large MTA pool on Bancor will attract more trades from aggregators, professional market makers and ultimately more fees for the platform
- mStable is focused on making mStable protocol token MTA as liquid as possible. The mStable DAO recently proposed to deploy circa US$5 million into a 50/50 Uniswap MTA/DAI pool which was later ratified by Meta governors in a vote.
- In addition, the Uniswap MTA/WETH pool has $7.4m in liquidity (938,588 MTA + 1480 ETH), with a 24-hour trading volume of $3.7m.
- A MTA/BNT liquidity pool has also been whitelisted on Bancor offering single-sided liquidity and impermanent loss protection. It currently has a liquidity depth of $62k.
- Bancor’s phenomenal growth and launch of single-sided liquidity pools with impermanent loss protection has definitely caught the interest of the mStable community, as it offers a superior value proposition through a HODL + LP strategy while simultaneously offering impermanent loss protection
- This proposal is seeking to increase single-sided capacity in the MTA pool by increasing the Co-investment limit to 1M BNT, and the mStableDAO is keen to seed US$1m in initial liquidity in MTA.
- Further down the line, there is an opportunity to divert some MTA in staking contracts (~US$33m) into this liquidity pool
- Uniswap is the primary DEX for facilitating MTA trades, with liquidity routing through the MTA/ETH pair
- We believe there is a huge potential to attract MTA LPs to Bancor given Bancor’s unique impermanent loss protection which offers MTA holders the ability to offer single-sided liquidity
- We require the help of Bancor’s governance to open up space for more MTA LPs to provide single-sided liquidity, attracting larger trades on Bancor and accruing higher swap fees to the platform