Proposal: Increase the trading liquidity limit in the CHZ pool from 20k BNT to 50k BNT

DAO Archive (SUBMITTED)
1

Proposal to increase the trading liquidity limit in the CHZ pool from 20k BNT to 50k BNT

For this proposal to pass, it requires a 35% quorum and 66.7% supermajority.

This proposal is expected to appear on Snapshot for voting on 2022-01-30T00:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

TL;DR

  • The pool has been full with no trading liquidity limit increase proposal since its whitelisting in June 2021.
  • Increasing the pool size would significantly reduce the price impact in the pool, offsetting increases in the pool fee.
  • The pool is currently the shallowest in any Ethereum DEX, and has been consistently full.
  • This proposal seeks to increase the trading liquidity limit in the CHZ pool from 20k BNT to 50k BNT. If the pool is filled, a new trading liquidity limit increase may be proposed.

Rationale

DEX liquidity on Ethereum

The CHZ pools with deepest liquidity in Ethereum DEXes are:

  • The CHZ/USDT 0.3% pool on Uniswap v3 with $1.48m liquidity, and an extrapolated APY from the fees accrued in the past 24 hours of 21.93% [1].
  • The CHZ/ETH 1% pool on Uniswap v3 with $364.86k liquidity, and an extrapolated APY from the fees accrued in the past 24 hours of 3.39% [2].
  • The CHZ/ETH pool on Uniswap v2 with $109,356 liquidity, and an extrapolated APY from the fees accrued in the past 24 hours of 7.93% [3].
  • The CHZ 0.2% pool on Bancor with $97,374 liquidity, and an extrapolated APY from the fees accrued in the past 24 hours of 1.19% [4].

The extra liquidity would bring the total pool liquidity to at least $237k if it is full, with BNT at $2.37.

Volume and fee performance

CHZ pool weekly Volume and Fees are presented in Figures 2 and 3, respectively.

Screenshot 2022-01-23 at 13.13.15
Screenshot 2022-01-23 at 13.13.152088×526 99.6 KB

Figure 2 - CHZ weekly volume since the end of August.

Screenshot 2022-01-23 at 13.13.35
Screenshot 2022-01-23 at 13.13.352086×522 97.8 KB

Figure 3 - CHZ weekly fees since the end of August.

The pool would benefit from a larger trading liquidity limit to reduce swap price impact, increase volume/fees and thus improve APY.

FOR

Increase trading liquidity in the CHZ pool from 20k BNT to 50k BNT.

AGAINST

Keep the trading liquidity in the CHZ pool at 20k BNT.

[1] Uniswap Info
[2] Uniswap Info
[3] Uniswap Info
[4] Bancor: Converter 642 | 0x6680728F13BebA75ae30cC2ea4e0C148aD59Ad32

2 Likes
2

Chiliz is a reat project. Why noy 300K BNT trading liquidity?

1 Like
3

Didn’t see much support from the community yet. If the pool fills up, it’s definitely a good idea to increase the trading liquidity limit again then!

1 Like