TIP-011 Purchasing T - ETH curve liquidity

Proposals
1

Purchasing T - ETH curve liquidity

Currently the Threshold Network has an ETH loan that it is using to LP in the T - ETH curve pool. This pool is currently being incentivised through Votium, the DAO is capturing approximately 60% of the incentives from the pool.

Building out Protocol Owned Liquidity (POL) means that the DAO does not need to continue “renting” liquidity through liquidity incentive programs. The DAO is able to take a longer time horizon and wear the impermanent loss (IL) risk which ensures that liquidity does not get pulled in times of volatility when community members need access to liquidity. Providing liquidity also generates assets for the DAO through the fees collected as an LP.

This proposal has two components that can be voted on separately.

  • Running an Olympus Pro pilot
  • Making an OTC purchase between 48,000 and 64,000 crvTETH

Olympus Pro pilot

Features:

  • $250k budget for 1 month pilot.
  • 7 - 8% discount.
  • 7 day lockup.
  • Success is evaluated with the Olympus Pro team after 30 days.
  • 3.3% fee to Olympus Pro.
  • Co-marketing opportunity.
  • Start date would be asap if the proposal passes.

Benefits:

  • Test market appetite for a larger bond program.
  • Build POL.
  • Opportunity for Threshold Community to purchase T at a discount.

If the Olympus Pilot is deemed successful it would then be run at a larger scale to meet the treasury diversification targets by taking a larger T - ETH position and expanded to include stable pairs. This expanded program would be pending the DAO approving the treasury budget.

Notes:

  • Olympus team strongly recommends a max 7 day vesting term.
  • Successful campaigns have co-marketing campaigns
  • Initial onboarding / vetting process is complete.
    • Olympus Pro requires $1M USD of liquidity of pool depth and monthly volumes greater than $250k which the T - ETH pool meets.
  • No tech lift required from Threshold teams.
  • The price impact risk in the event that the $250k of T sold is dumped on the market is small due to the depth in the T - ETH pool.

OTC LP Purchase

Features:

  • Same terms as the Olympus Pro pilot.
  • Approximately $1.5M - $2M T - ETH position.
  • Owner intends to stake T when the network goes live.

Benefits:

  • Increases POL and CRV and CVX rewards received.
  • Saves $30k USD - $45k USD in Olympus fees.
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2

A bond program with a short lockup may not be the best way to acquire POL

The 3.3% Olympus Pro fee + 8% bond discount make it fairly high cost of acquisition, especially given that the treasury already has plenty of T to create a T - ETH pair with.

As such this proposal has been put on ice and replaced with this proposal to deposit T only into the T - ETH pool when the pool is ETH heavy.

Which is being voted on at

https://snapshot.org/#/threshold.eth/proposal/QmUw6pXcr2dhoKXZ4QXjG7GG48KmMfqyQbbuN4voREJSRk

2 Likes