Connext<>Giveth Bridge Liquidity Proposal: Enhancing Liquidity and Accessibility for Giveth Token

[Stee]

Proposal Description:

Giveth is gearing up to integrate a bridge via Connext to connect our liquidity on Optimism and Gnosis, a move aimed at facilitating seamless cross-chain swaps for the GIV token. This integration presents a golden opportunity to solidify liquidity and accessibility for GIV holders across both chains. We propose a staggered release plan for providing liquidity and actively participating in the bridge integration process.

Proposal Rationale:

Building this Gnosis Chain<>Optimism Bridge with Connext is a big boost for Giveth token accessibility, unlocking more liquidity and cross-chain activity. There are very few routes for moving money between these two chains and having GIV as an option will undoubtedly increase our on-chain volume and metrics helping us with RetroPGF and Speculators.

Connext’s integration further increases Giveth token benefits with Lifi, Metamask and other integrations without us needing to do anything.

Expected duration or delivery date (if applicable):

2 weeks max

Proposal Details:

Staggered Release Plan:

• Total Liquidity Allocation: 20 million GIV tokens (10 million on Gnosis Chain, 10 million on Optimism).
• Staggered Release Strategy: To carefully manage the process, we propose the following release schedule:
  • Initial Add: 5,000 GIV tokens on each side (for 1 day)
  • Second: 200,000 GIV tokens on each side (for 2 days)
  • Third: 2 million GIV tokens on each side (for a week)
  • Final: The rest.

Implementation Details:

• Almost No Development Required: Integration entails one line of code adjustment, replacing the link to Jumper with the link to Connext.
• Integration with Connext: GIV token will be seamlessly integrated as a liquidity route in platforms like LiFi and MetaMask Swap, enhancing accessibility and usability for GIV holders.

Next Steps:

1. Signal support on this forum post vote

2. Snapshot Vote: Initiate a DAO vote to approve the allocation of GIV tokens for the bridge integration.

3. Implementation: Proceed with the agreed-upon release schedule, test the bridge and coordinate closely with the Connext team to finalize the bridge integration to their frontend.

4. Monitor and Rebalance: Continuously monitor liquidity and user engagement post-integration, making necessary rebalances to optimize liquidity and ensure a seamless user experience.

5. Marketing Campaign: Promote the use of our bridge, increase activity for Optimism and potential RetroPGF rewards.

Team Information (For Funding Proposals)

@gereeroyale (Kay on Discord) to handle bridge liquidity

Skills and previous experience in related or similar work:
Kay is one of our awesome Devops and has set up our node ready to hold this liquidity.

## Funding Information

Amount of GIV requested:
20 Million (10 Million on Gnosis Chain. 10 Million on Optimism)

Ethereum address where funds shall be transferred: 0x79EfFa11d95931A7e1717f9Eb655eE43e35Ef265

[Griff]

Should we go forward with this bridge solution with Connext?

• LFG!
• Maybe, let’s discuss further
• No

[mitch]

There’s a couple issues here I have with this proposal:

GIV Liquidity Available

Where the heck are you going to get 20M GIV from!?

Looking at our 3 liquidity multisigs - mainnet, Optimism & Gnosis Chain they have combined around ~7M GIV, less than half of what this proposal is requesting.

So assuming we use the ENTIRETY of our remaining GIV earmarked for liquidity initiatives (which I think this falls under that category) where do we get the remaining 13M?

We have approximately 94M GIV in the GIVgarden multisig which is earmarked for community proposal funding initiatives. ( I don’t feel this is quite as applicable.)

The nrGIV holds ~25.5M GIV and that’s for contributor rewards & payments (Once upon a time we used the bulk of it to pay Griff for contributor reimbursements)

So there’s a few options here but I think contributors should understand that we’ve run out of GIV tokens allocated for liquidity and if you think this proposal deserves 20M GIV tokens, we would need to reappropriate from other sources…

However

I think 20M is TOO MUCH GIV, We don’t have any data or validation on this proposal regarding:

1. If it will actually be useful for anyone outside of a handful of GIV whales.
2. How much tokens we reasonably need to meet demand.

If I’m mistaken and there is data to justify the need of 20M GIV then please share it.

To put it into context 20M GIV is 10% of our circulating supply, the circulating supply includes all GIV held by anyone on any chain, GIV staked into GIVpower and GIV in our existing liquidity pools.

My recommendation is that we lower the amount deposited as liquidity to 5M GIV and monitor it’s usage. If we see it is quickly running out of GIV and needs to be rebalanced too often then we should visit depositing more tokens.

Without any data and using only unvalidated assumptions we should not commit with such a large amount of our GIV token supply.

Recipeint Address

Who’s address is this receiving the funds? 0x79EfFa11d95931A7e1717f9Eb655eE43e35Ef265 - I don’t recognize it.

[geleeroyale]

I agree that we probably get by with relatively low liquidity - at least in the beginning. I am hoping that increasing liquidity on Optimism is beneficial for our token, as I am not convinced that Gnosis Chain is the greatest ecosystem for investors.

As for the address 0x79EfFa11d95931A7e1717f9Eb655eE43e35Ef265 - this is an address I generated the wallet for on an airgapped machine.

Currently - Only I hold the private key for that address, but the machine itself is accessible by the devOPS team and its possible to extract that private key from the node itself.

[Stee]

If we can make it happen with less liquidity with no issues let’s lower the amount to something more reasonable.

If demand picks up, we can reevaluate more liquidity as need be.

[mitch]

Following up on the discussion on the GIVernance call yesterday. From what I understood this proposal will want to take funds from the GIVgarden multisig.

It will need to follow our updated process for requesting community initiative funding. Once this proposal has passed minimum advice process of 5 days it will need to go to a Snapshot vote.

I’d recommend a Basic Vote if you would like to vote yes/no on the full 20M requested or a Single choice vote if you want to check DAO preferences for 20M or smaller amounts.

[Giantkin]

imo redo the proposal with other numbers of giv. with open ended possibilities. say 5m giv, more used if successful and deemed needed… (or maybe it takes another snapvote anyway, so no need to open end it)

who is going to watch it? kay going to manage, and offer update DAO on progress data? (and decide on more/less giv, rebalancing etc.

would a MS address be used for after setup? new spin up (imo) if so.
(if it cant be, looks like devops has access to current address, that good/bad)

Risks: Smart contract risks (always), Bridge exploits, bridge contract risks on top of normal smart risks… (somewhat mitigated by a known entity handling the bridging, but still there.)
and depending on the above Address, risk about using a non MS address.

Maybe put a … reevalute date in. after 6months this is evaluated and either continued , expanded, or shut down.

Another chain be better? this could be a test run for others. doing our own bridge setup, do we gain the fee’s (or some of the fee’s ofc)

I think im currently against, but its close.

( Snapshot options maybe do , yes, no, Maybe with changes, abstain?)

[Griff]

GIV on gnosis (and the liquidity there) has a lot of trouble moving to OP Mainnet, If you donate and get GIV on gnosis chain, and you want to use it, you have to bridge to mainnet or sell for another token and then bridge that token, and buy GIV on the other side.

This is a lot of friction to move GIV around.

This proposal will drastically reduce the cost of moving GIV from chain to chain which is really important for our economy.

Not only will it reduce the cost, but the DAO will actually earn GIV in bridge fees, as opposed to the current situation where other random market makers are extracting fees from our community for bridging our fractured economy.

[JakeS]

but why 20M exactly? how was that number come up with?

[geleeroyale]

@Giantkin @JakeS @mitch @Griff @Stee

xPosted from #givernance:

Hey - there is still some development work needed to get this going. As you can see there is actually a staggered solution proposed. Of course the timescale might be stretching out and for 20 MIL giv I would like to secure the setup more - also demand would need to make it necessary.

Maybe an ammendment is needed that makes the FINAL option dependent on reevaluation?

[Griff]

For Liquidity Provision we have to divide the number by 4.

20M becomes 10M on each side.

The 10M on each side becomes a 5M/5M GIV/GIVx pool

5M = ~$50,000

50k/50k pool will let people move $5k without too much slippage but they can’t move $20k very well

Thats the math.

[karmaticacid]

I really think that having a bridge for Gnosis < > Optimism is valuable, and we can also set up our incentives program extension for GIVpower to try to move more people from Gnosis to Optimism…

If want to make a bigger shift to OP, maybe we even consider changing GIVbacks to have GIVbacks go out on Optimism for most chains… and just gnosis for gnosis…

But I think this requires some more discussion.

Do we want to start communicating across comms channels that we’re moving over & making it easier to move over?

I don’t feel confident that adding this bridge w/o the rest of the plan built out, that this will actually be used much/a very good use of our GIV.

Also - what happens to this 20M GIV in the bridge as people use the bridge? Are we eventually able to pull it out?

[Griff]

@geleeroyale

Hey - there is still some development work needed to get this going. As you can see there is actually a staggered solution proposed. Of course the timescale might be stretching out and for 20 MIL giv I would like to secure the setup more - also demand would need to make it necessary.

I agree, i think we should only grab 2 Mil for testing to start and then the 18 Mil can come later in a second multisig send, but ideally we can just do one vote, and give the multisig the power to send that out.

@karmaticacid

Also - what happens to this 20M GIV in the bridge as people use the bridge? Are we eventually able to pull it out?

Its held by our devops team, they can withdraw at any time.

[karmaticacid]

I think many people here are concerned with the amount of GIV being taken for this one initiative without a proof of concept, and also without clear big picture management or a clear understanding of where this is going.

I think a second vote should be created requesting a smaller “test” amount, and then we can have some reporting back here on how it’s going before allocating more.

[JakeS]

Thanks for more clarity on this! And Agree with @karmaticacid would like to see more of the roadmap after

[Giantkin]

Looks like tests are built in… but maybe expanded upon a bit more… so its more clear (and explained win/lose scenario) based on those tests.
5m giv enough to cover? or not. need more. any other issues with this setup. 7d test minimum? longer?
(after test, decided this isnt the way to go, put in proposal to fully unwind this setup if deemed unsuited…(so no wait if its a total bust)

i …think that would cover the main concerns… ?

I think us having our own liquidity on all the chains is primary. (and bridging means we keep all the giv on one side or the other)

(my question. for later… if ‘everyone’ leaves gnosis, what then happens to giv there…) (but thats a separate conversation (and Future Giveth problem)

Highlevel, yes, i think we should do this.

[karmaticacid]

We discussed in the gov call some more details around this proposal, some key takeaways that led to my voting “For” on this proposal, assuming it passes:

• We plan to launch soon on centralized exchanges w/ exit to Optimism, but 70-something% of our liquidity is on Gnosis (and fees to get there are outrageous)
• Giveth liquidity multisig will be able to effectively vote/control the phases of this… We’ll start with for example, 2.5-5 Million on each side, and set it up. We’ll make sure that the bridge is being used through Jumper, routed through the “usual pathways of Connext”, and then will post a follow up here in the forum to update the community before moving forward.
• This really requires someone to PM it, and I’m willing to help manage it and the comms unless/until it can be delegated fully.

[Griff]

We are starting very cautiously:

Get your multi-sig transactions signed faster

First tx is only for 4000 GIV

[karmaticacid]

Hi Folks,

This forum post is missing some updates, so I’ll sum some things here.

The Snapshot vote requesting 20M GIV total for this bridge’s liquidity passed on April 3, 2024.

The discussion in the governance calls and on this forum indicate the liquidity multisig can be “topped up” a max of 20M GIV from the GIVgarden multisig to fulfill this proposal, but we are following a staggered release plan.

1. We have tested creating nextGIV & bridge liquidity with the 4k GIV send prior
2. We are setting up transfers of an additional 2M GIV (from the liquidity multisig) to the router address, to increase the liquidity on either side of the bridge and re-verify.
3. The next step will be to asses the bridge performance, and then add the final GIV amount.

We have been coordinating with the Connext Team (now rebranded to Everclear) to get this rolling. And I’ll provide a further update here once we make some more progress.

[karmaticacid]

Just an update here.

We successfully set up and ran the GIV bridge from Gnosis to Optimism via Connext for a a few months, having used 20M GIV total for liquidity for the bridge.

Unfortunately now the Connext team is deprecating the supporting tech for this bridge, so we have unwound the bridge LPs and will be returning that 20M GIV to the GIVgarden multisig.