KIP-024 - Quipuswap Liquidity Proxy and kUSD Sales Contracts

Chas Smith




I have written two smart contracts. One is a proxy to control the Quipuswap 1.0 liquidity that the DAO currently owns. The second sells kUSD into the marketplace as long as the price is favorable according to the Harbinger oracle. These contracts have had an independent security assessment done by Inference AG, a Switzerland-based auditor. You can find the report at ReportPublications/Inference AG - Kolibri DAO - QS Wrapper - v1.1.pdf at master · InferenceAG/ReportPublications · GitHub. The assessment was paid for by the Tezos Foundation.
You can find the repo here: GitHub - chasdabigone/Custody-Free-Quipuswap-Wrapper: A wrapper that enables a DAO to interact with Quipuswap without giving up custody of tokens.

I am asking for 5000 kUSD and 1000 kDAO as compensation.

This proposal has three parts:

  1. It will transfer the Quipuswap 1.0 Liquidity into the Quipuswap Liquidity Proxy contract.
  2. It will transfer 50,000 kUSD into the Quipuswap Maker Ceiling contract to buy XTZ.
  3. It will transfer 5000 kUSD and 1000 kDAO to myself as compensation.


The protocol owns what we call Protocol Controlled Value (PCV). Right now, a multisig is the most secure way for us to handle exchanging and managing those funds, but a multisig is not a great solution for long-term security. There are many examples of high-value multisignature contracts becoming compromised. So, in April when the DAO decided to buy XTZ and add liquidity, I decided to build a trustless solution for doing those things.

The DAO also wants to buy XTZ but the only way at the moment is a peer-to-peer OTC exchange, or small purchases on the AMMs available. The Quipuswap Maker Ceiling contract allows the DAO to sell kUSD for XTZ over time, while at the same time providing kUSD liquidity into the marketplace at a set premium. This allows the DAO to provide liquidity at a price it chooses, keeping kUSD peg from going too far above $1.00 (and pricing oven owners out) in stressful market conditions.


The protocol owns liquidity on the Quipuswap 1.0 XTZ/kUSD pair. Since it is held in the DAO treasury contract, it is not possible to execute liquidity management functions. The Quipuswap Liquidity Proxy contract will let the DAO manage liquidity through a combination of a multisig and proposals without giving custody over to the multisig. More info here: Custody-Free-Quipuswap-Wrapper/ at main · chasdabigone/Custody-Free-Quipuswap-Wrapper · GitHub

The community also wants to continue buying XTZ with some of the kUSD that the DAO holds. The Quipuswap Maker Ceiling contract will sell kUSD into the market as long as the price is favorable. There are multiple settings to manage the risk - you can find more info here: Custody-Free-Quipuswap-Wrapper/ at main · chasdabigone/Custody-Free-Quipuswap-Wrapper · GitHub

Please feel free to ask any questions you may have. You can also contact me on Discord @ chas#7053

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