Providing liquidity with Tokemak

Hi Frens,

I’m a big fan of what Tokemak is doing on Eth for supplying liquidity. They’ve made transitioning to L2’s a priority and I want to suggest that we start preparing to be one of the first L2 projects to win a reactor. Tokemak takes a bit to wrap your head around so I implore you to DYOR and I’ll do my best to answer questions.

The transition from our current model to Tokemak is simple. Instead of staking GHST or LP tokens on, users would stake GHST with Tokemak and receive aGHST tokens. aGHST tokens could then be staked on for FRENS rewards. It obviates the need for a FRENS task force to balance rates between different pools, offers greater capital efficiency, eliminates IL, and offers the additional incentive of TOKE rewards.

The DAO would be able to stake GHST with Tokemak, providing liquidity (and earning TOKE) without diluting the FRENS pool.

Thanks for your attention! Again I’m happy to answer questions. I’m no expert but I wanted to start the discussion and raise some awareness.

I love the idea of providing single sided liquidity and identifying yield bearing solutions that protect our treasury from impermanent loss. Tokemak is a really cool project and it’s been fun to follow them the last few months. I am concerned about how fast they will reasonably be able to roll out to L2s, but if they announce and secure liquidity for Polygon, we should definitely continue the discussion about it.


I am concerned about how fast they will reasonably be able to roll out to L2s

Yeah and I wish I had more info but all I can say is I wouldn’t underestimate Carson and the team. They implemented fee-less voting on Polygon pretty last-minute and still rolled out without a hitch, for example.

It may be a while but I wanted to give people time to get familiar with Tokemak. I’ve been following for a few months as well and gaining confidence in the project as I learn more. If the discussion can onboard a few pilots in the meantime we’ll stand a much better chance when L2 reactors open. There’s stiff competition if you look at the projects that have won (or lost) the reactor votes. I think competition for reactors will only go up as time goes on.

But most importantly I want to head-off more complicated measures regarding liquidity (e.g. a FRENS task force). If we start building infrastructure in the wrong direction it becomes much harder to transition.

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