Proposal to Increase Co-investment for DRC to 50,000 BNT

DAO Archive (SUBMITTED)
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This proposal is expected to appear on Snapshot for voting on 2021-08-08T12:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

DRC (Digital Reserve Currency) has been whitelisted by the Bancor DAO on July 29, 2021. The initial co-investment limit was 30,000 BNT. The DRC/BNT pool became popular among LPs, and currently, it has almost no available DRC space. As of July 31, 2021, the available space was 8,215 DRC, which was equal to $20.5.

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TLDR
• This proposal seeks to increase the co-investment limit to 50,000 BNT in the DRC pool.
• It will open more space for LPs and will lead to an increase in the depth of the pool and the trading volume once LPs add liquidity.
• A larger DRC pool will attract more trades from aggregators and professional market makers to Bancor, which will ultimately lead to more trading fees.

Abstract
There are currently ~30K BNT and ~40M DRC tokens in the DRC/BNT liquidity pool. The pool has roughly $240K in liquidity. At the moment, LPs cannot provide any substantial DRC single-sided liquidity, since there is no capacity. This proposal is seeking to increase single-sided capacity in the DRC/BNT pool by increasing the co-investment limit to 50,000 BNT.

Motivation
If we want to attract more DRC LPs to Bancor, we need to open up space in the pool so that they can provide more single sided liquidity. This would allow us to grow the liquidity in the pool and increase the trading volume, which will ultimately result in higher trading fees.

Since its inception, the DRC/BNT pool data shows that it has been in high demand and has been filled up completely within 48 hours since it’s launch on the Bancor platform.

The possibility of one-way staking with the impairment loss protection encourages DRC liquidity providers to increase the pool size. The increase of the DRC pool size will ultimately lead to the increase of the trading volume on the Bancor platform.

The DRC Foundation will be actively supporting the Bancor market, explaining DRC holders the unique advantages offered by Bancor, such as low trading fees and the availability of limit orders.

We expect the trading volume for DRC to increase significantly on the Bancor platform because of its competitive advantage comparing to other decentralized exchanges, where DRC is currently traded.

Overall, we believe that the increase of the BNT co-investment will benefit both DRC and Bancor ecosystems and their communities.

2 Likes
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Very simple value proposition here for Bancor community members, I think.

The DRC community is incredibly active and dedicated - as shown by the rapid filling of the first round of liquidity provision - and would be a great addition to the Bancor ecosystem and community.

This step is a simple increase in the size of the liquidity pool, with no external reward incentives.

In the near future there may be a chance to move the Digital Reserve functionality to the Bancor exchange, which will be a strong driver of volume to Bancor. (see Digital Reserve Platform | Digital Reserve Currency (DRC Token))

1 Like
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Seems like the DRC community has already exhausted their initial co-investment (30K)

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and have also added some extra BNT on top. We are still close to Uniswap in terms of pool depth:

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but this co-investment should put us on top. The following might also be of interest to our community:

In the near future there may be a chance to move the Digital Reserve functionality to the Bancor exchange, which will be a strong driver of volume to Bancor.

and as the project grows, better integration could be sought with our platform.