Proposal: Increase the trading liquidity limit in the TRAC pool to 1M BNT

DAO Archive (SUBMITTED)
1

Proposal to increase the trading liquidity limit in the TRAC pool to 1M BNT

For this proposal to pass, it requires a 40% quorum and 66.7% supermajority.

This proposal is expected to appear on Snapshot for voting on 2022-01-23T00:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

TL;DR

  • The TRAC pool has been part of a pool fee experiment aiming to maximise APYs [1].
  • The pool fee has changed between 0.5% and 4% since November 2021, and volume data doesn’t suggest an obvious linear relationship between the volume and the pool fee.
  • Increasing the pool size would significantly reduce the price impact in the pool, offsetting increases in the pool fee.
  • Increasing the liquidity would therefore allow the pool fee to be increased at no or little extra cost for traders and arbitrageurs.
  • There is a significant interest from the OriginTrail community to stake TRAC on Bancor.
  • This proposal seeks to increase the trading liquidity limit in the TRAC pool from 500k BNT to 1M BNT.

Rationale

DEX liquidity on Ethereum

The TRAC pools with deepest liquidity in Ethereum DEXes are:

  • The TRAC/ETH 0.3% pool on Uniswap v3 with $417.56k liquidity [2].
  • The TRAC/WETH pool on Uniswap v2 with $357,936 liquidity [3].
  • The TRAC pool on Bancor with $3,191,464 liquidity [4].

The extra liquidity would bring the total pool liquidity to at least $6.02m if it is full, with BNT at $3.01.

Liquidity Share

The TRAC Liquidity Share on Bancor has been increasing ever since the pool started, currently at 83.4% (Figure 1). This data suggests that there is a significant interest from the OriginTrail community to stake TRAC on Bancor.

1600×283 189 KB

Figure 1 - TRAC Liquidity Share [5]

Volume and fee performance

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

Screenshot 2022-01-18 at 17.49.13
Screenshot 2022-01-18 at 17.49.132088×520 99.5 KB

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

Screenshot 2022-01-18 at 17.48.31
Screenshot 2022-01-18 at 17.48.312082×522 101 KB

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

FOR

Increase trading liquidity in the TRAC pool from 500k BNT to 1M BNT.

AGAINST

Keep the trading liquidity in the TRAC pool at 500k BNT.

[1] Proposal: TRAC-BNT fee change schedule and performance analysis

[2] Uniswap Info

[3] Uniswap Info

[4] Bancor: Converter 671 | 0x987Caf390Fc5100dA6db7e8Ec4b651Cd3b61bc32

[5] Dune Analytics

1 Like