Proposal to increase the trading liquidity limit in the LQTY pool from 150k BNT to 300k BNT

DAO Archive (SUBMITTED)
1

Proposal to increase the trading liquidity limit in the LQTY pool from 150k BNT to 300k 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 2022-03-26T23:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

TL;DR

  • The LQTY liquidity on other decentralised exchanges justifies proposing an increase.

  • Increasing the pool’s liquidity will improve price impact and help direct more volume to Bancor.

  • This proposal seeks to increase the trading liquidity limit in the pool from 50k BNT to 100k BNT.

Rationale

The Deepest LQTY pools are:

The LQTY/ETH 0.3% Uniswap v3 pool with $2.15m liquidity, and $268.54k daily volume [1].

The LQTY/ETH 1% Uniswap v3 pool with $341.46k liquidity, and $1.97k daily volume [2].

The LQTY 0.2% Bancor pool with $539,231 liquidity, and $8,991 daily volume [3].

The extra liquidity would bring the total pool liquidity to at least ~$1.3m, if the space in the pool is filled. If this happens, a proposal to increase the trading liquidity limit again should be considered.

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Figure 1 - LQTY weekly volume since the beginning of July 2021.

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Figure 2 - LQTY weekly fees since the beginning of July 2021.

FOR: Increase trading liquidity in the LQTY pool from 150k BNT to 300k BNT.

AGAINST: Keep the trading liquidity in the LQTY pool at 150k BNT.

[1] Uniswap Info

[2] Uniswap Info

[3] Bancor: Converter 645 | Address 0x3D36e8dF307aFc3EBc90e9EF200C790Ee9a93161 | Etherscan

3 Likes
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I support this, I’m a fan of LQTY and I think they should have deep liquidity on Bancor

2 Likes
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Love LQTY, only problem i’d have is there is currently around 100K USD worth of open liquidity so I’m not sure an increase will result in a higher TVL. As I understand @Derrick You’re from the LQTY Team. Would the team be interested in filling any of this newly available space?

3 Likes
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Hey @tenzent. We can’t make guarantees on TVL increase of the pool, but the chances are quite high that it happens since we have a large token unlock coming on April 5th: Liquity Launch Details

2 Likes
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Do it make sense to make the pool deeper before a potential token unlock - which typically coincides with a dump?

I would vote no now, but if this proposal goes live April 17th or later, you have my vote.

2 Likes
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Yes it does when considering > 70% of the LQTY supply so far has been staked to earn protocol revenue. Due to this, it’s a fair assumption that most of the unlocked LQTY will follow and dilute the staking APR — this makes being an LP much more attractive, especially on Bancor.

3 Likes
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Interesting proposal, I consider liquidity a quality project and also hold $LUSD in similar regards. I think having a deeper pool on Bancor is a great idea as I would like for us to always be competitive for any tokens that we onboard. While the unlocks do seem concerning, I don’t think this is any different than other projects that we have onboarded who also had similar unlock schedules after one year or tokens that vest over time. The increase seems warranted (doubling of the existing co-investment) in my opinion and I will be voting in favor.

1 Like