MCB liquidity on Uniswap V3 was previously set by community holders, but lately it seems the liquidity has been removed.
To further stabilize the $MCB liquidity situation, MUX contributors propose to add 500K $ARB from the DAO airdrop to an Uniswap V3 $MCB / $ARB pair with the range of $0 - $10 to balance the inflow & outflow, as well as safeguarding holders’ interests.
Since the current MCB price is above $10, adding 500k $ARB to the UniSwap V3 $MCB / $ARB pair in the range of $0 - $10 will only increase Bids and not Asks, so there will be 0 $MCB selling pressure from this action. This set of liquidity will act more like a floor fund.
- Community discussion surrounding this proposal
- Community members vote to approve/disapprove this proposal
I fully support this proposal. Deeper liquidity always good for traders as much as lpers. Also DAO can scoop some MCB if price goes lower via this way and create a better buy wall.
btw, MCB already has a good amount of liquidity but since most of them on the v3 pools.
That’s out of range liquidity.
Data from Revert Finance:
Would recommend setting range with PoL/MCB ratio in mind, something like $2 - $10 currently. More fee generation potential when/if the price trades within range.
where do u check this btw?
Hi - I support this proposal, however, I also suggest a solution which could be implemented in the medium term as it may require more thought and tweaking: I propose to adopt an approach to the problem of liquidity similar to Radiant’s V2 update. For details see here: Dynamic Liquidity (dLP) - Radiant 2.0
In short, they have eliminated single-sided staking and replaced it with a Balancer 80/20 pool and tied it to earning protocol fees. In a few days the pool has gone to USD 40 million. This has various advantages:
- consolidated liquidity
- 80/20 pools reduce IL and is paired with ETH (blue-chip)
- liquidity providers get up to 60% of protocol revenue depending on how long they lock their liquidity
- this leads to a win/win for both protocol and LPs - the more dLP one provides the more revenue one earns
I understand this may require some changes to the MCB/MUX tokenomics, which is already not the simplest setup. However, I think in the long-term, replacing single-sided staking with an incentivised dLP pool would be beneficial to the protocol.
Happy to hear comments.
This proposal fails to address a number of issues:
1- Transparency on protocol owned exit liquidity - main liquidity of 321 ETH was pulled from Balancer 7 days ago by what seems to be an EOA. Relying on individual LPs for token liquidity on top of a vote-escrowed tokenomics with unpredictable unlock schedules and sizes is a sure recipe for disaster and very unprofessional.
2- Ensuring optimal conditions for future stakers; for ve-tokenomics to work, protocol needs to provide sufficient MCB liquidity for inflows to offset outflows. Relying on the flimsy v3 positions deployed by current MCB holders should be an automatic no-go. Please take into account the conversion funnel for future staking.
Current MUX Exit Liquidity situation is as follows (excludes native token value):
Due to the nature of ve-tokenomics and dynamic unlocks, this ratio should be around 2%. $ARB Sharpe Ratio isn’t suitable to be the main liquidity pair in the long run.
My recommendation is as follows:
a- Send this proposal to a vote immediately as the situation is too critical. I will vote yes.
b- Create a discussion thread for mid & long-term strategy and alignment with veMUX holders.
Thanks a lot for joining the discussion and sharing the suggestions guys!
MUX contributors will look into the suggested solutions and improve the liquidity condition more efficiently in the long run (like Radiant 2.0, Trader Joe and Balance ve8020).
Currently, the MCB liquidity in the $10 - $20 range is still in a reasonable condition.
However, the liquidity in the $0 - $10 range can be a potential risk, and that’s the main motive behind creating this proposal.
Since the liquidity issue is urgent, MUX contributors will send this proposal to the voting process now. Then, after the liquidity situation becomes more stable, we can continue discussing more efficient liquidity solutions and make improvements in the long run.