Feedback appreciated on 1. Total size of deposit 2. Breakdown of pairs
The proposal below would send 400 ETH from DXdao treasury to be deposited in Swapr on xDai by way of the dev multi-sig
xDXdao currently holds $671k of liquidity in Swapr on xDai with an additional $450k set to be deposited in the coming days. This has helped to attract users and volume to Swapr xDai, creating a base of liquidity for common pairs, hopefully enabling liquidity in smaller tokens. On xDai, Swapr is competing against Honeyswap ($10m) and Baoswap ($26m), although Honeyswap sees more trade volume. With eco-routing, Swapr plugs into these now, making Swapr the best trader experience on xDai now, with revenue opportunities from trades through base liquidity supplied by DXdao.
Swapr Beta is just around the corner, which will feature a do-it-yourself farming experience. This will help Swapr capture the long-tail of new tokens, but base liquidity is needed to supplement and ensure a smooth experience.
This proposal sends 400 ETH to the dev multi-sig address, previously identified as 0x5f239a6671bc6d2baef6d7cd892296e678810882 whose signatories have been verified as REP holders. The dev multi-sig will convert the ETH into the following tokens and then bridge over to xDai (on Omni bridge), and then deposit the tokens in xDXdao, where they will be deposited into Swapr by xDXdao via a proposal and the liquidity relayer.
The pair targets are:
- WETH-WXDAI (20%)
- WETH-WBTC (20%)
- USDC-WXDAI (20%)
- WETH-DPI (20%)
- WETH-STAKE (20%)
The percentages are suggestive, actual amounts may vary slightly. It will ultimately be up to xDXdao to deposit the funds in swapr.
Transfer of these funds relies on the dev multi-sig. xDai also presents risks because security is dependent on its limited validator set. Additionally, cross-chain bridges are still new and not battle-tested.
This proposal will put the funds in xDXdao around ~$2.3m, depending on amount of worker proposals completed. This is about 4.5% of DXdao’s total assets. The transfer and liquidity deposit is worthwhile because of the opportunity to support Swapr while the market is moving to sidechains and Layer 2.
There is also upside in that the assets deposited will gain fees from trading, but there is also a risk of impermanent loss on each of the pools.
This is the first time DXdao would hold STAKE token, which is the underlying token for xDai, so it is a way of DXdao supporting the infrastructure.