With the highly anticipated migration from Polygon to XAI on the horizon, we aim to rebuild our liquidity pool for our primary value and governance token on the Arbitrum based Camelot DEX. This proposal outlines a strategic reward system for LP (Liquidity Provider) staking, a move aimed to bolster our token’s liquidity by allocating voting power to LP tokens and additional rewards.
Motivation
To establish a DAO-owned DEX liquidity pool on Arbitrum following the XAI migration.
To enhance the attractiveness of our token by demonstrating deep liquidity.
To allow those providing essential liquidity to the $CU ecosystem a say in the direction of the DAO by allotting voting power to liquidity providers based on $CU LP tokens held.
Details
This proposal applies to our primary value/governance token. For clarity and simplicity, given the ongoing RBW Token Migration and Conversion to CU Token proposal, we will refer to our token as “RBW” throughout this document. Upon implementation of CUIP-044 - Migrating RBW and Converting to CU Token, all references and values pertaining to RBW herein will be automatically adapted to reflect the CU token equivalencies.
The implementation of this proposal includes the following steps:
Withdrawal of the DAO’s LP position from the Balancer 50:50 RBW/wETH pool, followed by the deposit of an equivalent amount into a 50:50 RBW/ETH pool on Camelot V2/3 in Arbitrum after the migration.
Adding a new voting strategy on Snapshot recognizing RBWLP as a voting token with a voting power conversion of 1:1.
Conclusion
As we join the Arbitrum and XAI ecosystem, it becomes increasingly critical to showcase the resilience and stability of our token economy. By participating in the DAO’s LP staking, we directly contribute to the liquidity and stability of our token, making it more appealing to potential participants. By committing to the LP, we ensure that both the DAO and its members are well-positioned to fully leverage the opportunities presented by this migration. We encourage your support for this proposal, as it represents a pivotal step towards our collective success in the Arbitrum and XAI ecosystem.
The proposal makes sense for me.
Both staking and LP providers are taking a commitment and a risk: locking tokens for a longer period via staking or being exposed to Impermanent Loss via LP.
So it’s only fair that both parties get a saying in DAO decisions.
I don’t think we need to put back an equivalent amount, specially if you want to incentive new LP providers.
Current RBW circulating mcap is around 7m including 1.4m in liquidity on Polygon, the ratio is already very very high, way higher that what is done on average on other projects. Having deep liquidity is good to reduce slippage, but also slow down price appreciation, need to find the perfect balance there.
I absolutely like that you brought this up. Ngl, this is one of the ideas presented by the market-maker to ensure this doesn’t make it hard to move the needle. If the DAO is comfortable with it, definitely something that can be discussed.
That would equate to just 85k srbw votes. which is nothing and that is exactly my point.
At this rate providing 100k rbw in LP will only give the user just 1 LP token and 1 vote compared to 100k votes the user can get just by staking 100k rbw instead.
Both single side staking and LP staking will provide voting power.
Yes, that is exactly the point as indicated in the abstract and motivation. To increase the attractiveness of the token upon migration, we need more liquidity providers.
No one will bother to LP if providing 100k rbw in LP will give them just 1srbw.
I would rather just stake 10 rbw to get 10srbw votes instead of providing 100k rbw in LP to get 1srbw vote.
That is totally fine as this is something each and every person should decide for themselves as it falls under the purview of DYOR and individual strategies. Some may opt for RBW rewards like you and some may look at the potential of LP rewards on Camelot.
Definitely can be discussed further based on other’s feedback. 1:1 can still be adjusted if there’s strong support for higher voting power for LP providers. However, it’ll need to be based on the LP token as it’s how strategy works on Snapshot.
So this proposal is setup so only whales have a say. I am opposed to this approach. Players who are smaller should have at least an opportunity to chime in and vote with their staking.
The other issue with this approach is that it is not based on play… just how much money you throw at the pile. Badges give the aspect of you at least play the game.
