Generate sustainable liquidity by combining $100k GIV with equivalent tokens of other Gnosis Communities to create an index token: $WATER
Deadline & Intro:
18 APR 2022
But @chadfi that’s less than 2 weeks away! Hush hush my sweet summer child, the original proposal has been baking for ~2 months, please find a comprehensive discussion in the original 1hive forum post here:
Additionally, please find the Token Engineering Commons (TEC) proposal here:
This proposal outlines the positive impact WATER can have on Giveth. Consider it a summary of, and some copy pasta from, the two proposals above, including highlights from ongoing discussions – as they pertain to Giveth.
DAO-2-DAO token swaps are an affordable way to generate liquidity. Giveth has successfully deployed token swaps with the Token Engineering Commons (TEC) and Bright DAO, with many more in the works. While 1-to-1 token swaps provide great value, 1hive has proposed a very innovative means to gain exposure to a diversified pool of assets in one fell swoop. Enter: the WATER index.
This proposal is seeking $100k in GIV to be paired with $WATER, a to-be-minted shared liquidity token which includes stake from:
- 1Hive (PASSED)
- BrightID (PASSED)
- Giveth (that means you!)
- Token Engineering Commons
- Opolis (TBD)
Giveth was chosen as a potential partner because of our aligned interest with the other DAOs building long term value on Gnosis Chain.
Each DAO provides $100k in their token into a multisig (see multisig details below). Given all 6 DAOs participate, 600k $WATER would be minted and then paired with each token in a Honeyswap LP. No other $WATER would be minted and it will only be used in Liquidity Pools. I encourage you to read Paul’s comment here to get an understanding of the index’s correlation:
We are not providing tokens as an investment meant to be sold later. This index acts as a means of sustainable liquidity for GIV, helping us to move away from the [very expensive] liquidity reward model. While experimental in nature, this index has the potential to be an incredibly strong source of sustainable liquidity.
In essence, this is the equivalent of 5 token swaps all baked into one nice wrapper.
Agreement (Copy Pasta):
If at any time a participating token project passes a proposal deciding it no longer wants its WATER liquidity (#RageQuit) - its DAO<>WATER LP is removed and the DAO receives back 85% of the tokens it provided for liquidity, or 85% of its total tokens still in its DAO<>WATER LP - whichever is lower (15% penalty).
- Note from Griff: “We can choose to get our tokens back at any time but we face a 15% penalty, so really we are in or we are out, I wouldn’t consider this refundable. That said, we do have major influence on the multisig and if an unforeseable issue arises or we have a reasonable excuse for why we want to leave (better than, $TEC is pumping and all you losers are dragging us down), I think it would be considered.”
If at any time the Water Liquidity Board decides it doesn’t want a participating project’s liquidity with WATER anymore (#Excommunicated) - that project receives 100% of its tokens still remaining in its DAO<>WATER LP back.
Participating projects can repeat this proposal to add more liquidity (#ReUp) without needing to approve a new governance process, as long as no new tokens are joining.
Multisig & Team Information
The multisig that would has 2 representatives from each team:
Holding: 5/12 gnosis safe.
Minting: 8/12 gnosis safe.
Looking Forward (Copy Pasta courtesy of @Griff)
Exactly how the $WATER token evolves is up to the multisig. There are discussions about adding other communities to the index in the future… but I think it is likely this is a one time thing and once launched nothing will change.
As an index token, $WATER is very cool. Most index tokens require some sort of liquidity mining to bootstrap, yet $WATER has liquidity by virtue of its creation. It has not been modeled… yet… and how things will go has had a lot of thought put behind it but it still hasn’t really been tested.
- Provide $100k GIV to create liquidity via $WATER
- Do not proceed as part of the $WATER genesis