IIP-54: BED:ETH liquidity - Direct provision by Index Coop

Does this mean that I should delete the proposal from Snapshot? cc @overanalyser

it goes live in a few hours (11:00 am PT // 6:00 pm UTC)

Bankless community does plan to provide between $100k-$200k in liquidity at launch.

1 Like

So basically nothing. I provided almost as much initial liquidity for MVI and that’s not even my own product nor do i see a direct benefit from supporting the product. We should be asking for minimum $500k

Hello,

Some notes from the weekly call:

  1. Bankless will also be providing liquidity on uniswap v3. (~$100 to $200 k).
  2. Legal concerns:
  • Not hugely different to the provision of governance token (i.e. INDEX balancer pool).
  • Other protocols provide liquidity for governance tokens
  • There may be legal considerations for the multi-sig signers.
  • Overall, no regulatory clarity.
  1. We don’t currently have a Bot planned, one option would be to contact Flashbots so they can build one.
  2. Liquidity will be on v3, so more effective (but more management) than v2 used for MVI.

@gregdocter based on the discussions in that call earlier, and the notes I’ve put in this reply, I think we have all the information INDEX holders need to continue with the snapshot. Therefore I want to proceed.

3 Likes

@kiba I know you have been advocating for liquidity minting for a while, and I am a big fan of the idea and am anxious to find the place at the Coop to implement - but in this case wouldn’t it be more profitable to not mint liquidity as the alternative isn’t mining, but rather direct use of treasury which will then be brought back into treasury? I guess it depends on how well we manage the position? Correct me if I am missing something, though.

As far as the general proposal - I am FOR, but we should not underestimate the effort it will take to manage this position, and while this proposal doesn’t require a specific “strategy” per-say, it would be great to start hashing out specifics as to ranges and positions that are getting deployed, what our the triggers for re-balance, how often are we monitoring, who is it that is monitoring, and what is the process for re-balancing…

Thanks for the work on this so far @overanalyser and @Matthew_Graham - please let me know how I can help out here!

1 Like

This is the exact kind of direct liquidity provision we need to start moving towards as a DAO. ETH <> BED will be one of the lowest IL pairs on the market and is a good safe place to start.

I would rather have us get a quality rep in with direct liquidity provision for a low-risk pair like this. The majority of the learnings here will come from the actual execution. There will always be open questions here - especially around range management - but I would rather implement and solve than do nothing.

This is a major step away from liquidity mining and IMHO a step in the right direction.

@Kiba is right - we probably don’t have the experience in-house right now to do this perfectly. But the only way to build that experience is through planning and executing. The only way we will become proficient in direct liquidity provision for v3 is to directly provide liquidity for v3 and iterate based on learning.

Regarding regulatory clarity - we could spend months/years trying to get regulatory clarity from lawyers and the best we will get is an “I dont know”. Either we are a DeFi protocol that fully leverages the power of the ecosystem and our treasury or we are not.

We need to move away from this mentality where every time something is innovative or creative the regulatory boogyman rears its head. We are years away from any cohesive or applicable regulatory framework. If we want to drive the discussion on regulations it would be far more valuable for us to develop an internal regulatory/cultural/value framework that ensures the holders of our tokens are protected from bad actors.

7 Likes