Tokenomics - Migrate DAO-Owned Liquidity to Uniswap V3

Proposal Name: Tokenomics - Migrate DAO-Owned Liquidity to Uniswap V3
Program Champion(s): 0xLucas, Icedcool, HashedMae, general tokenomics crew
OP Date: January 27, 2022
Status: Forum Voting [Draft->Voting->Forum Voting->Closed]
Voting Link: Discord Vote

TL;DR

• Migrate Sushiswap protocol owned liquidity to Uniswap V3 full range position.
• This move will create a price oracle, allowing us to launch a Rari lending market and generate more revenue as the Uniswap position has fees defined at 1% (Sushiswap is 0.25%).

Background

The Tokenomics Department is working on creating lending markets for $BANK. This will initially begin with deploying a Rari Capital Fuse Pool on Ethereum mainnet while opening up the ability to also launch on a Layer 2 lending protocol (Market.xyz on Polygon or Rari on Arbitrum) in the future.

Adding a lending market has multiple benefits. For one, it allows BANK holders to deposit and borrow against their holdings rather than having to sell. More importantly, this allows the treasury to open up its own lending market as described by Dan Elitzer.

In order to kick this off, we need strong price oracles for $BANK that’s supported by lending markets. Rari Capital leverages Uniswap V3 oracles; however, all of the DAO owned liquidity is on Sushi. As such, we can easily bootstrap a lending market by migrating our liquidity to Uniswap v3 as a full range position (the position providing the strongest oracle).

Implementation

This proposal looks to pull the liquidity that we have acquired from OlympusPro Bonding, owned by the treasury, and migrate that over to Uniswap v3 as a full range position. As of writing, this amounts to $500,000 in liquidity. As a result, this will allow us to have a price oracle that is integrated with Rari, and any future integrations with other defi platforms.

Additionally, Uniswap offers a 1% fee pool. This fee tier is for smaller cap, exotic tokens with more volatility (perfect for BANK) and is where the majority of the existing liquidity lives. The benefit here is that this will make Uniswap the primary source of liquidity for BANK, driving the majority of the volume Uniswap and the fee revenue to the DAO treasury.

For reference, Sushiswap fees are 0.25%, meaning the treasury can generate 3x the revenue by migrating.

More info on uniswap oracles:
Uniswap oracles

I have one questions based of other discussions, if the DAO decides to move towards an L2 for operations, would this still make sense to do on L1? or would it be beneficial to put this liquidity on L2 starting with Balancer and then possibly moving to uni?

Will migrating liquidity mess up the Sushiswap pool? Or cause a drop in the price of BANK?

Right now the main priority from this proposal to have a price oracle for lending markets.

We can launch other programs once we lock in on a L2. We’ve opened up the option for Polygon (can access Discord with it, etc.), but the majority of activity is still on mainnet.

@Ap0ll0517 - The only issue is that the Sushiswap pool will no longer be the main source of liquidity. It shouldn’t affect the secondary market.

Seriously, 4x revenue with a free oracle. Come on. This is seriously way too big brained.

Support!

Strongly in favor of this proposal. Love hearing that the DAO owns a half mil of its own liquidity. Send it.

I approved this proposal but have a tangentially-related suggestion: it would be nice if the tokenomics group had a page which listed strategically significant BANK deployments and their purpose.

Such a page, updated regularly, would allow newbies (like me) to learn the ins and outs of DeFi and help encourage our community to rally behind tokenomics efforts. The history of a page would also become a roadmap for future DAOs to take inspiration from in their own tokenomics efforts (very useful if we go with a subDAO model).

Department of Tokenomics

Give me a shout if there is other info you’d be interested in.

Edu guild is working on tokenomic training.

Thanks for the link and I appreciate the info that’s on there. I was hoping for amounts of BANK deployed to platforms by BanklessDAO and current boosts.

For instance, in the CC once, you said something like « Balancer is for people who want to hold and Olympus is for people who have at least 65k BANK »

That information would be really useful to centralize. If I’m someone wondering what I should do with the BANK I earn, Tokenomics Dept probably has the best info on what to do.

Not against this, but will we still be able to buy and sell on Sushiswap. Currently Sushi always has the best swap price with the least slippage. Can you test the numbers of a funded Uni v3 against current Sushiswap. Sushi can swap 5ETH of Bank quite nicely and usually for 10k+ more BANK than Uniswap. I assume the V3 numbers are better than V2 for BanklessDAO, but the numbers currently are almost always better for users on V2. Do you know if the numbers will be better on V3 once the pool is set up?

Great idea. Please make it a “Read Only” channel