Hey pDAO, the IMC are looking for some feedback on 3 items. All of these are in flux, not finalized, just draft numbers, blah blah – don’t hold us to them and give thoughts freely.
RPL/ETH Protocol Owned Liquidity (POL)
We’re thinking of doing ~4 months worth of buying POL in the 20-25 ETH range per month on Uniswap. We were thinking of alternating between adding to a range-bound (eg 0.005-0.03 or .0075-.021) LP and a full-range LP each month. Note that since we only have RPL, any POL stuff implies selling RPL to buy the paired token; this is not a huge amount, but noting it.
RPL/ETH liquidity mining
We’re considering increasing the current amount (1.25 ETH + 50 RPL per fortnight). Right now it’s on Balancer, but that need not be the case.
Coincentivizing osETH/rETH along with Stakewise
This one’s a bit complex. The pool is very efficient cuz both sides are LSTs. That said, it’s unclear how good osETH/ETH liquidity is thus far – without that we don’t gain much for our main goal (rETH/ETH liquidity). We also want to avoid over-growing a specific LST route, as this can damage rETH if that LST has an issue and depegs. That said, long-term, if we can have this be a common pattern this can make our liquidity a lot cheaper. Numbers like a 25% coincentive (we put in 1 unit for every unit they put in) have been floated.
Full-range POL guarantees we always have a valid price (which is also important for oDAO duties, btw). Big-but-not-full ranges are similar with some active management to expand/shift, but that’s a much weaker guarantee.
Full-range LP protects against attacks. I support this. Please sell RPL slowly, negative RPL price action is demoralizing.
The IMC doesn’t have enough ETH to dampen volatility so don’t bother with range-bound LPs.
RPL/ETH liquidity mining
There’s already a lot of RPL/ETH liquidity on the sell side (a lot of RPL needs to be bought for the price to go up i.e. people are selling their RPL tokens). We don’t need to incentivize that.
If you can somehow incentivize the opposite then I think it’s worth doing otherwise I’d spend the funds elsewhere.
Coincentivizing osETH/rETH along with Stakewise
Is the depeg risk worth cheaper liquidity? Not sure. But if Stakewise is spending their funds bootstrapping their liquidity I think we should take advantage of that.
If the attacks are trying to move the price within the bounds of the range, range-bound LPs actually protect stronger than full-range (as there’s more dollars per tick that need to be “defeated”). Ofc - if you only have range-bound, then the cost to go to a price of zero or infinity is finite, so full-range is also important.
We’re roughly talking about selling 10-12.5 ETH worth once a month. I’m seeing 9 sales of 12+ in the last day, with 5 being over 18. I don’t think we matter much here, for better or worse.
I agree in terms of getting there quickly. I think I’ve likened it to getting 20-25x TVL by liquidity mining as opposed to using POL, but ofc the money is spent permanently vs kept as an LP NFT asset. I think we can get to a relevant impact to trading slowly over time (especially in cases where liquidity is removed by large players).
This is… somewhat possible. Example relevant tools could be to incentivize a specific range on Bunni, or to preferentially incentivize LP positions that have more ETH in them on Merkl. It’s an interesting thought.