GHST Liquidity Rewards on new launch - Pixelcraft / DAO collaboration

Hi frens,

Some community members are worried about the waning liquidity of GHST on Quickswap and their gradually decreasing LP rewards. Rather than simply allocating more liquidity to the pool, we are considering partnering with an up and coming liquidity aggregator. What follows is a detailed proposal regarding this potential partnership.

Before going into details, it’s important to address the fact that this will be a partnership that requires direct participation from AavegotchiDAO and your treasury. If the following moves to a Signal Proposal and finally to a passed Core Proposal, it would mark the first time AavegotchiDAO treasury funds are spent.

A quick check of https://aavegotchi.com/treasury shows that DAO treasury currently sits near 870k DAI and 515k GHST.

As we proceed through COCOON V1.5 of the AavegotchiDAO, it makes sense to make a number of proposals that are funding related. These, naturally, require each member’s highest scrutiny and deliberation. It’s my hope that by the launch of AavegotchiDAO V2, we have arrived at a point where the DAO can standardize funding requests, budgets for specific committees or roles, etc. In the meantime, let’s use this potential partnership to, at the very least, test drive a funding request.

Without further ado…

Pixelcraft Studios is frequently contacted with all types of collaborative opportunities that directly affect Aavegotchi, GHST, and most importantly, our community. We reject the great majority of these proposals and pride ourselves on our filtering abilities. Our frens circle is tight and grows with each success: Aave…Polygon…Quickswap… Unicly…to name a few.

Recently we were approached by a promising up-and-coming team building a platform called DinoSwap. In short, they’ve survived weeks of due diligence calls and we believe they offer a compelling product that doesn’t yet exist in the Polygon ecosystem, but collaboration is a decision that we as a community will need to make together.

I will now copy paste the verbatim open letter their team lead has addressed to AavegotchiDAO and then you may read on for the TL’DR and options we see ahead:

--------------BEGIN DINOSWAP MESSAGE--------------

Hi everyone, I’m writing on behalf of DinoSwap as a core contributor. DinoSwap is an upcoming cross chain farming/dex aggregator launching on Polygon. I’m aware that there is continued interest in building additional liquidity on Polygon and that’s what we’re all about through our unique LP token farms and single asset staking via our DINO token.

We wanted to propose $200,000 USD worth of GHST tokens to be contributed strictly as rewards into the “Extinction Pools” on DinoSwap. DinoSwap is not a DEX or AMM itself, it actually routes trades through QuickSwap and SushiSwap via Polygon. DinoSwap aims to become the PancakeSwap of Polygon (and abroad). We cannot disclose our launch partners and collaborators just yet but it is a strong list of reputable projects and backers.

One unique feature about DinoSwap is the 100% toll-bridge (DINO token burn) within the extinction pools - for which we’re requesting $200,000 USD worth of GHST in rewards. All stakers must agree to burn 100% of their DINO in exchange for a fair distribution of GHST tokens. This creates deflation to the supply of DINO (without facilitating a sell, as it is actually a swap) and encourages users to compound their yield by liquidity mining with more GHST tokens. This mechanism is how we will be able to achieve extremely high APY on our farms & pools.

For the $200,000 in GHST tokens provided to our extinction pool, we will be providing approximately $2,000,000 in DINO rewards over a 3 month period to stkGHST-WETH LPs on Quickswap. Farmers of stkGHST- WETH will receive DINO tokens just by staking their stkGHST-WETH LP receipt token into the DinoSwap platform. DinoSwap will be targeting approximately 300% APY in emissions, assuming there is about $3,000,000 in aggregate liquidity.

For example, if the fully diluted valuation is $135m, the APY will still target 300% on the farm. The multiplier will be set for 90 days. 65 million DINO tokens (uncapped supply) will be available at launch, which predominantly will be distributed via farming rewards.

We are confident in the value-add for the Aavegotchi network in terms of bootstrapping liquidity. If there are any questions, please do not hesitate to ask.

Sincerely,

T (Rex)

--------------END DINOSWAP MESSAGE-------------------

From our conversations with their leadership, we understand that DinoSwap plans to launch at the latter half of this month, so we have enough time to come together as a community and decide if this is something we want to participate in.

Our proposal is:

Pixelcraft Studios will contribute 100k USD worth of GHST (taken from our monthly 50K tap allocation) while AavegotchiDAO treasury will match with another 100k USD worth of GHST.

PROS:

  1. Potentially significant increases for GHST liquidity demand.
  2. Wider exposure of GHST to the fast growing Polygon user base and users of DinoSwap.
  3. Bootstrapping a new, third major liquidity pair in GHST-WETH.

CONS:

  1. DinoSwap is a new, untested (but audited by Certik) product that may not live up to the hype.
  2. The $200K in GHST provided is going into an “extinction pool”, which means it will be consumed by yield farmers participating in liquidity mining on Quickswap, in exchange for the new DINO token (whose value is unknown).
  3. The assorted risks of the unknown and opportunity cost.

We would also integrate FRENS rewards for the GHST-WETH liquidity providers, in order to maximize the LPs participation in the Aavegotchi ecosystem.

The exact percentage of FRENS rewards can be discussed, but given WETH’s volatility it would likely be greater than our USDC rewards but less than the QUICK pair.

I’ll conclude by encouraging lots of discussion to take place and ask that you don’t vote in this snap poll until you have done some healthy pondering on both options.

If there’s general support shown here, I’ll move forward with a SigPost by the weekend’s end.

Should AavegotchiDAO actively support funding the above described partnership to the tune of 100k USD worth of GHST from the DAO’s treasury?

  • Yes, let’s partner with DinoSwap.
  • No, let’s not.

0 voters

6 Likes

One thing to be aware of with the stkGHST-wETH pool is that Quickswap probably won’t incentivize it with QUICK (unless we ask them very nicely), but even if they did, it wouldn’t matter because the stkGHST-wETH token would be going into the DINO rewards contract, not the QUICK rewards contract.

7 Likes

After reading this proposal, my main question is the ability of DinoSwap to deliver on its promises.

Maybe I am misreading this but the return on investment seems unusually high (300% APY). I would also like to know more about their collaborators and backers as this is pertinent information.

I went to gather more information about DinoSwap and found what I believe to be there website (app.dino.finance) and tried to view their “About” information which opens a new tab on Chrome to the same DinoSwap landing page without actually showing me the “About” tab.

I guess my worry is providing nearly 20% (edit: really 7% when considering DAI and GHST in reserve)
of our DAO reserves to DinoSwap to basically finance their liquidity pool and help them to increase the price of their token with the burn feature with no real return for gotchizens who do not contribute to their LP. @Jesse_gldnXross @coderdan are they willing to provide you with copies of the audits they’ve had with Certik for review by the dev team/DAO? Maybe a community call with T(Rex) where we can ask more questions and pick their Mesozoic brain about this potential partnership.

I find this collaboration interesting but need more information to make an informed decision.

9 Likes

Edit: Wrong links. Ignore this message.

4 Likes

Good thing I didn’t connect my wallet on that site :sweat_smile:

2 Likes

I believe it is DinoSwap not DinoFinance

2 Likes

Yes to be clear, they are still in stealth mode, we’re veryyy early here lol They haven’t even started marketing yet.

The links above from dear Moon are unrelated.

DinoSwap only has their Twitter: @DinoSwapHQ

DinoSwap telegram exists as well: Telegram: Contact @DinoSwapOfficial

3 Likes

That’s the right logo. Checks out

2 Likes

This is a very valid concern, and is one of my main concerns with this partnership. AavegotchiDAO treasury will not directly benefit from this partnership, although it could indirectly benefit due to exposure for Aavegotchi (more players) or income generated for LPers that can be put back into Aavegotchi (wagmi).

2 Likes

Yes, I don’t see a way to attach the Certik security assessment they shared in this forum. But I will post the PDF in our Discord DAO channel.

3 Likes

Of course, the LPers could just turn around and sell their GHST onto the market for other tokens if those other LPs are getting higher DINO rewards in Dinoswap, in which case we’d just end up dumping 200k GHST onto the market. Many unknowns here. Seems like the gamble is that new money will come in to provide the GHST for LPs, driving up the price of GHST, and LPers will reinvest the 200k from the Dao either back into the stkGHST-WETH treasury or into the Aavegotchi ecosystem.

3 Likes

Their website dinoswap.exchange has a sign up, but does not send verification codes yet according to their telegram feed.

1 Like

I pretty much agree with everything @noahns and @nofuturistic have said. I’m all for trying to boost our liquidity, but not like this, not risking our funds for something that may or may not work at all. IMO they have a lot to gain from this, whereas we… not so much.

5 Likes

They are in stealth. The team isn’t onboarding users yet. We’re only discussing them because we need lead time to make a decision about joining them at launch.

In short, you wont find much online, but they are backed by industry known VCs and a team with a track record. Otherwise we wouldn’t be considering this partnership.

9 Likes

I trust that the Pixelcraft guys have done their due diligence, and they may know some information about backers that they can’t share with us as the result of an NDA. I think the fact that Pixelcraft is putting up 100k of their own GHST speaks volumes about their confidence in this project. There do seem to be some risks, but potential benefit to GHST price, quickswap liquidity, bringing new folks into the game before H2, and more FRENS rewards are significant. This has my vote!

8 Likes

I’m proposing this because of the pros outlined above but I definitely am fine either way. We’re always working for healthy opportunities for GHST.

Still to address your concerns, this proposal is based on our team’s month long conversations and vetting with Dino team, we are confident in their competency. That said, admittedly there are always more variables that effect success or failure.

In terms of treasury… its the community’s and you may have very different ideas about how to allocate funds. I’d only say we see this as one way to put the otherwise stagnant treasury funds to work.

It’s best for active GHST LPs, of which our community has many. But increased liquidity incentives are also good for general GHST holders, all else being equal.

5 Likes

Thanks for addressing my concerns. Just to be clear, I don’t have any doubts whatsoever that you have the community’s best interests in mind, and that you’ve tried your best to get to know everything you need to know about this project before bringing it to the community.

That said, I’m afraid it’s not good enough for me. From what we know, they are just another farm, they don’t have a real competitive product or a first mover advantage from what I’ve read. Not saying they won’t succeed, just that on paper, if it was my money, I wouldn’t invest in it. As you said, there are many variables, no one can predict the future, so we all just try and make do with what we know now. There are also different kinds of investors, so maybe where I see too much risk for a possible reward, others see a great opportunity worth the risk.

I agree with putting the money in the treasury to work, but what to do with it would be a long discussion that we probably don’t wanna start now. I also believe there are other things we can do to get more liquidity without spending 200k GHST (some of which would probably be dumped in the market), I started a couple of threads about this. In any case, and although my vote is a no, if the community decides to do it, I’ll always support its decision and I will hope it all works out for Aavegotchi, which is what we all want.

As an active GHST LP, I’m obviously one that could benefit immensely from this, but be it because I don’t know as much as you do about this project, or because we have different opinions about it, I have to be true to myself and vote no this time. However, I’m usually not a proud person, so if I see something that makes me change my mind before the core proposal, I may change my vote.

11 Likes

Yeah, I’m trying to understand what happens in these pools:

  1. Supply GHST-wETH liquidity at Quickswap
  2. Stake LP tokens at DinoSwap
  3. Get rewarded in DINO (around 300% APY)
  4. DINO is swapped for GHST upon exit from stake (??? this is where I’m really fuzzy)
  5. DINO is burned.
  6. LPer walks away with rewards in GHST, but they were exposed to DINO price movements while staking.

is that right?

Personally it sounds more like funding for them, the “dino” rewards honestly do not sound very tempting to put 200k towards I think. Feels like buying a car you haven’t seen yet to me

GHST-WETH pool sounds good to me and growing the polygon ecosystem seems like a good thing. More dapps on polygon = more users, which could bring more people to aavegotchi.

Also, I would like a good farming dapp on polygon. I don’t really trust anything out there right now. DinoSwap sounds like it could be a good solution. I share the concerns of others on here about this possibly being a gamble. Of course, most things in crypto are gambles and it’s all about asymmetric rewards. Do the potential rewards for DinoSwap partnership significantly outweigh the risk? It’s hard to say since there is limited information about the project, but Pixelcraft has apparently been talking with them for a while. If Pixelcraft thinks the project is legitimate enough to put up their own funds, then I am all for the proposal.

I’m going to wait a bit to see what other points are mentioned before I vote thought :slight_smile:

4 Likes