ETH/DXD GnosisChain liquidity Proposal

Continuing the implementation of the Approved New DXD Token Model, this post is a proposal to deploy additional WETH/DXD liquidity on Swapr on GnosisChain, totalling approximately 15 WETH and 35.565 DXD.


One of the implementation provisions of the New DXD token model was to use DXdao treasury assets to increase DXD liquidity. It committed up to $1m of DXD/ETH. The proposal authorizes liquidity to be provisioned once the DXD Treasury NAV ratio surpasses 60%. The latest calculation is 68%.

So far, 130 ETH and 300 DXD have been allocated on mainnet and sent to the DXSwap relayer to be deployed, of which approximately 57.7 ETH and 152 DXD have been deployed. The remaining allocation on mainnet will be deployed separately from this proposal, with the total adding up to approximately $400,000 in liquidity (depending on price).

The Swapr DXD/WETH liquidity pool on GnosisChain is currently pretty thin, with only ~11.5 ETH and ~27 DXD, totaling roughly $34,000 in liquidity. Over half the liquidity was recently removed. Given the strategic importance of GnosisChain to the DAO, we believe that the treasury should add liquidity to this pool to improve the ability of DAO participants and others to more effectively interact with it.

15 WETH is a little less than half of the available WETH on the GnosisChain treasury


We propose depositing 15 WETH and 35.565 DXD liquidity over 4 transactions to the Swapr WETH/DXD liquidity pool on Gnosis Chain.

  • Proposal 1 would send 15 WETH from the DXD GnosisChain treasury to the DXSwap relayer.
  • Proposal 2 would send 36 DXD from the DXD GnosisChain treasury to the DXSwap relayer.

Those 2 transactions would be proposed concurrently using the Funding and Voting Power Scheme and upon passing would be followed up with 2 multi-call proposals, separated a day apart. We are proposing 2 transactions due to the low liquidity in the pool to prevent manipulation.

  • Proposal 3 would add 6 ETH and 14.4 DXD in liquidity to the pool.
  • Proposal 4 would add 9 ETH and 21.6 DXD in liquidity to the pool.

All liquidity addition transactions would have a 5% slippage tolerance, but due to fluctuating prices, less of 1 asset may get added to the pool. Remaining assets in the DXSwap relayer can be removed back into the DXdao treasury via an optional 5th proposal.

Once completed, these transactions will be added to the running total of DAO owned liquidity and tracked as the DAO continues to execute on the New Token Model.

Notes, Risks, and Considerations

  1. Note on Treasury NAV: This liquidity provision was approved as part of the new DXD Token Model, but there was not specifics on how it affects Treasury NAV. Many projects do not include protocol-owned liquidity as part of treasury calculation, but for clarification, the ETH in the DXD/ETH LP position counts toward Treasury NAV, but the DXD in it does not count towards circulating supply
  2. Impermanent loss is a risk for all 50/50 constant-product automated market makers. That should be limited here because of the higher fee as well as the price range that DXD/ETH should trade in. Using the Swapr Liquidity Relayer comes with its own set of risks as it relates to oracle manipulation. Breaking the deposit amounts down into smaller increments makes it more expensive to manipulate.
  3. Lastly, Due to how Automated Market Makers work, new DXD will enter the circulating supply should the price of DXD/ETH go above what the pool was deposited at. This issuance would be offset by more ETH “owned by the treasury” and thus shouldn’t have a large effect on NAV calculations, but DXdao should be mindful of this.