Andrew here from Set and IC advocate since its inception
The current levels of DEX $INDEX liquidity after 1 year are bad, so I would like to open a high-level discussion on what everyone’s views are to potentially increasing the base DEX liquidity using our resources.
Writing this on my phone so I’ll keep it short and sweet –
Low project liquidity and why it’s bad:
- Discourages distribution and access to INDEX due to the price impact, especially so for the larger investor who essentially needs to go OTC unless they like 5+% haircuts. OTC deals are also subtractive to positive price action whilst we maintain existing selling pressure
- Big players create massive volatility, 25K INDEX was sold by one wallet at around $50 over multiple transactions and basically dumped the price 20-25%, I personally think it’s quite bad one party can remove that much of the market cap of INDEX. We have old DPI farmers & even the likes of large fund wallets who have sold sizable positions and the current liquidity cannot facilitate these exits (without creating a terrible price narrative around INDEX)
- All this feeds into the stagnant price, which contrary to some people’s belief about short-sightedness, is bad. The market is fuelled by speculation, most crypto participants are investors/traders/speculators, not DAO and community evangelists. What drives growth in our products and INDEX are these majority participants. I believe every project in the crypto space should have an excellent base DEX liquidity (removing CEX listings from the equation) to enable these participants and I do believe other projects give this more merit than we do.
- Improving liquidity around INDEX is good, facilitating more trading, activity and hopefully, price appreciation is good, our contributors are paid in INDEX, our treasury is largely INDEX, this is not short-sightedness but trying to give the basic foundations to a token that will hopefully enable more growth within the Coop. Not to mention the social and media benefits that come from more INDEX holders and those that have a vested interest in the project.
Interested to hear other peoples take