Author:
Madfish Solutions [email protected]
Created:
10/06/2022
Status:
DRAFT
Overview
The proposal suggests to allocated 100,000 kDAO from Community Fund for:
- 50,000 kDAO for kUSD/uUSD/USDT/USDtz LP holders with 360 days distribution;
- 50,000 kDAO for kUSD/asUSDC/abBUSD LP holders with 360 days distribution;
Note: USDT means the Tezos-based asset issued by Tether.
Background
Quipuswap AMM
Until recently, Quipuswap supported only CFMM implementation. The asset price moves along the curve defined by a constant product. This means that each trade on the pool can change the price and that large trades may move the price significantly. This type of AMM is well suited for assets that may not be strongly correlated in value.
In June, Quipuswap Stableswap will be introduced. The AMM allows swapping exchange assets with low slippage enabling efficient stablecoin trading.
The curve is different from the Youves Flat, allowing to keep the price closer to the initial rate even with the notable reserves’ imbalance. Unlike Youves, the pools can have between 2 and 4 assets. Quipuswap Stableswap is an implementation of Curve.fi protocol for Tezos.
Allbridge x MadFish bridge
Allbridge and Madfish collaborated to build the cross-chain bridge between Tezos and 14 other chains and will release it soon. It aims to attract the flow of liquidity from other blockchains to Tezos, increase its audience, enable cross-chain collaborations, and simplify the use of ecosystem products for users of other platforms. Kollibri can benefit if there is a way to get its tokens with assets of other chains or by expanding Kollibri tokens to other networks.
Quipuswap Stableswap liquidity incentivisation
Farm with Tezos-based assets
Quipuswap Stableswap is the Curve-like implementation enabling even more efficient stablecoin trades, and creating some pool with kUSD should be helpful for stabilizing its price.
According to Quipuswap internal research, 90%+ of all transactions on Youves Flat are made by arbitragers. Therefore, creating the pool between kUSD and other stablecoins(uUSD, USDT, USDtz) listed on Youves will attract them to correct kUSD price and create fees stream for liquidity providers who are interested in providing liquidity to the pool.
As a result, it seems advantageous to allocate kDAO for liquidity incentivisation in Stableswap.
To this end, this proposal suggests creating a new farm on Quipuswap Farms for kUSD/uUSD/USDT/USDtz holders with the followed parameters:
- 50,000 kDAO allocated to the farm
- 360 days run time
The amount is smaller than in kUSD/uUSD, kUSD/XTZ, QLkUSD, and kUSD farms as it contains more non-Kollibri tokens.
Farm with bridged assets
The liquidity on Tezos is extremely low, and even the best token has a Market cap of a couple of millions. Without external liquidity, it is hard to grow.
Allbridge is the bridge that connects 14 EVM, and non-EVM chains. Tezos will be among them. Once it attracts the crypto and users from other chains, it would be good to engage them to use Tezos-based assets. The way to do it is to encourage new users to buy the assets on Tezos and provide them along with the assets they are familiar with to the pool. So, in this case, it makes sense to create the pool with kUSD and bridged assets. Liquidity mining will help to keep the liquidity in such pools.
As the Solana USDC(asUSDC) and Binance Smart Chain BUSD(abBUSD) will be the first bridged assets, it is rational to launch kUSD/asUSDC/abBUSD Quipuswap farm with the followed parameters:
- 50,000 kDAO allocated to the farm
- 360 days blocks run time
The amount is smaller than in kUSD/uUSD, kUSD/XTZ, QLkUSD and kUSD farms as it contains more non-Kollibri tokens.
Quipuswap farms
Quipuswap has more daily users, so launching farms on the QuipuSwap platform is likely to facilitate better capital efficiency and attract more liquidity to the pools.
Total costs
The Kolibri Community Fund contains 274,259 kDAO. This proposal would allocate an additional 100,000 kDAO to new farms, which would leave 174,259 in the Community Fund.
Misc
Quipuswap will additionally incentivize both pools.