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.
--------------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.
- Potentially significant increases for GHST liquidity demand.
- Wider exposure of GHST to the fast growing Polygon user base and users of DinoSwap.
- Bootstrapping a new, third major liquidity pair in GHST-WETH.
- DinoSwap is a new, untested (but audited by Certik) product that may not live up to the hype.
- 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).
- 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.