Upon genesis, the MUX protocol used protocol-owned liquidity (POL) as its foundation. The initial POL came from funds raised from previous rounds; also, 30% of protocol income continuously went to POL.
By August 2023, MUX has been successfully run for one year. During the runtime, MUX has reached $13.6B organic trading volume, onboarded over 16K traders, reached over $58M TVL(third-highest in the perps sector), earned over $9.4M protocol income, and the POL has grown by around $4M. The outcome is uplifting, and POL has played a crucial role in supporting MUX to achieve these results for the following reasons:
- Serves as the foundation of the MUXLP pool to support trading demands.
- Binds with the governance token, veMUX’s share of income.
- Total Protocol Income × 70% × POR(the rate of protocol-owned liquidity): Allocate for veMUX holders (in ETH)
- Funds the annual marketing budget to support monthly Twitter marketing & exposure activities, four airdrop campaigns, one trading competition, partnership-building activities, marketing contributor wages and additional marketing efforts.
- Serves as the safety fund to protect all LPs during black swan incidents. For example, during the Fantom incident caused by Multichain, POL bore $120K in losses to protect all LPs.
Based on the following context, the MUX contributors propose to add the remaining 1.38M $ARB airdrop to POL for the following reasons:
- Maintain and increase the share of veMUX holder’s protocol income by raising the foundation of the MUXLP pool.
- Increase POL and help to prepare for the development & marketing budget planning for the coming year. The goal is to continue making MUX competitive in the perps sector with support from the POL.
- Community discussion surrounding this proposal
- Community members vote to approve/disapprove of this proposal