Proposal: Increase Co-investment Limit to 1M BNT on RPL (RocketPool) Pool and set pool fees at .2%

DAO Archive (SUBMITTED)
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This proposal is expected to appear on Snapshot for voting on 2021-11-14T12:00:00Z. 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 to 1M $BNT for the $RPL pool.
  • It also seeks to lower the pool fees from .5% to .2% to be competitive with the Uniswap pools (V2 & V3)
  • It will open up space for LPs on the TKN side ($RPL) and increase the depth of the pool as LPs add liquidity
  • A larger $RPL pool will attract more trades from aggregators and professional market makers to Bancor which ultimately leads to more fees for our platform.

For

  1. A larger co-investment limit on the pool will let LPs provide single-sided liquidity and will lead to an increase in pool depth
  2. A lower fee will make this pool more competitive against the Uniswap pools (V2 & V3)
  3. More liquidity in the RPL-BNT pool should lead to larger volume from DEX aggregators and professional market makers sent in our direction
  4. More volume for Bancor leads to more fees for our platform and $BNT holders

Against

  1. We should not increase the co-investment limit on the pool or lower its fees

Abstract
There are currently ~329.4K $BNT and ~26.3K $RPL tokens in the BNT-RPL pool. This has resulted in a pool that has roughly ~2.9M in liquidity. At the moment, LPs on the TKN side ($RPL) can’t provide single-sided liquidity since there is no capacity. This proposal seeks to increase the $RPL pool’s single-sided capacity by increasing the Co-investment limit to 1M $BNT.

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Motivation

If we want to attract more RPL 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.

The top pool for RPL is on Uniswap V3 and it is paired with ETH. Pool depth is roughly ~37M and we should try to build up liquidity for this token since it has attracted a lot of attention recently (it recently launched on mainnet):

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There is also a decent size pool on Uniswap V2 (the one we should compete with):

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Note that both of these pools have a fee of .3% with a large amount of liquidity than what we have. Our pool is not capable of competing with either pool at our current fee (.5%) and I am also requesting that the fee be set to .2% for this specific reason.

Currently, the Bancor pool has no space available and LPs can’t provide single-sided liquidity on the TKN side ($RPL). I am proposing a 1M Co-investment limit for the $RPL pool which should open up roughly $3M in additional single-sided liquidity (assuming BNT price at $4.00). If this pool fills up completely, we would have a pool that’s roughly ~8M in depth and be more competitive with the Uniswap V3/V2 pools.

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