Proposal: Increase Co-investment limit to 1M BNT on MTA Pool

DAO Archive (SUBMITTED)
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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 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

Abstract :

  • 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

Motivation

  • 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

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4 Likes
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I think this is an excellent initiative, and a good pivot/addition to MTA and BNT’s existing liquidity pools.

We are happy to support this - and see alot of synergies between this 2 crypto OGs. :slight_smile:

Eugin

DeFiance Capital

3 Likes
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Hi guys,

It makes me super happy to see this being proposed here, as I’ve already opened discussions around this last year in the mStable forums, and therefore can only wholeheartedly recommend this move forward, and hope it will find sympathy in this community as well!

Will be happy to support this moving forward! :sunglasses:

2 Likes
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Looks good to me.
Please add a date for voting to the top of the document, e.g.:

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

Unless there are some strong counter arguments appearing on the next day or so, I’d say this is probably ready to go.

2 Likes
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Excellent proposal. Nothing like a good old win-win between 2 awesome DeFi projects. A no-brainer imo.

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Yes. So much yes. 100% in on this.

2 Likes
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@derc ping to edit this in

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This is fantastic. As I mentioned on twitter Bancor is killing it right now - impermanent loss protection, limit orders in amms, 2bn of tvl. I’m personally very keen for for this to be the beginning of a deeper collaboration, particularly in mStable staking v2.

Currently, in staking v1, stakers receive 40k MTA a week for locking up their tokens. These MTA tokens are currently sitting idle. I think there is a large opportunity for mStable to develop staking v2 to programatically add its deposited MTA to the MTA/BNT Bancor pool, which means that mStable staking incentives are also Bancor liquidity incentives. There’re currently c. 8m MTA (c.25-30m) in deposits.

This is a little down the track and may require mStable to request increasing the co-investment size, but wanted to flag here as this proposal kicks things off.

I suspect the above idea could be an interesting growth vector for Bancor if projects deploy their staked token as one sided liquidity here.

Either way, great proposal @derc! Excited for this

2 Likes
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This is a well written proposal. I specifically like the format that you selected and how well arranged the information is (looks oddly similar :wink:).

The co-investment seems reasonable to me given the liquidity of MTA in other DEXes. I would love to bring mBTC (soonish) and mUSD (once we have shadow pools) over to our platform as well and would support any whitelisting proposal put forth by the MTA community for these two tokens.

1 Like