Proposal: Increase Co-investment Limit to 350K BNT on DIGITALAX Monavale (MONA) Pool

DAO Archive (SUBMITTED)
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This proposal is expected to appear on Snapshot for voting on 2021-09-05T12:00:00Z. 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 350K BNT for the MONA pool.
  • It will open up space for LPs on the TKN side (MONA) and increase the depth of the pool as LPs add liquidity
  • A larger MONA 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 provided single sided liquidity and will lead to an increase in pool depth
  2. More liquidity in the MONA-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.

Abstract
There is currently ~161K BNT and ~1K MONA tokens in the BNT-MONA pool. This has resulted in a pool that has roughly ~1.4M in liquidity. At the moment, LPs on the TKN side (MONA) can’t provide single sided liquidity since there is no capacity. This proposal is seeking to increase single-sided capacity in the MONA pool by increasing the Co-investment limit to 350K BNT .

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Motivation

If we want to attract more MONA 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 MONA pool went live on 8/12 and filled up completely since then (less than 24 hours after launching):

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Note: Data is grouped weekly and 8/12 was the week of 8/9

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

The top pool for MONA is on Uniswap V2 and it is paired with ETH. Pool depth is roughly ~1.5M and we should be able to make the Bancor pool deeper to support larger trades with low price impact:

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Currently, the Bancor pool has no space and LPs can’t provide single sided liquidity on the TKN side (MONA). I am proposing a 350K (a 200K increase from the initial 150K ) Co-investment limit for the MONA pool which should open up roughly 800K in additional single sided liquidity (assuming BNT price at $4.00). If this pools fills up completely, we would have a pool that’s roughly ~3M in depth and outsize the UNI.

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I will note that the DIGITALAX community (their native token is $MONA) hosted W3FW (Web 3 Fashion Week) last week and invited Mark and Nate to hold a Bancor DeFi workshop:

Workshop
AMA

In addition, they also gave away Bancor physical hoodies, 150 $BNT, as well as Decentraland Bancor branded jackets for anyone that attended the Bancor sessions. This community has shown that they want to collaborate with the Bancor community and I think it is important for us to support them and to continue building a mutually beneficial relationship.

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Thank you @glenn. I totally agree with increasing the $MONA-BNT pool co-investment limit. Not only does this align with further supporting greater liquidity for the DIGITALAX protocol and $MONA token holders as we continue to scale quickly and implement new use cases, but also it’s an important step forward for also ensuring that BNT holders can equally benefit and gain exposure to the growth of DIGITALAX. In addition, it’s been a pleasure becoming a more thoroughly integrated part of the Bancor community through DRIP merch and W3FW. Really looking forward to having Bancor side by side along the ride!

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