MUX was honored to be one of the Arbitrum DAO airdrop recipients, and the 1.93M $ARB tokens reflect MUX’s dedication to the ecosystem. Therefore, it is crucial to effectively utilize the airdrop to boost MUX’s growth and contribute to the Arbitrum ecosystem.
After launching the $ARB market in March, MUX has witnessed a notable increase in trading volume and TVL. However, we are currently running into liquidity constraints to keep up with market demand. Increasing MUXLP pool TVL is our #1 priority to keep up with user demand.
The community discussions about the $ARB airdrop utilization can be mainly summarized into two directions:
- Use the $ARB airdrop as trading incentives
- Use the $ARB airdrop to help increase MUXLP pool TVL.
#1 is less of a problem today. All major markets frequently reach open interest caps and traders frequently don’t have enough liquidity to trade.
MUX contributors want to propose adding the 1.93M $ARB airdrop to the Protocol-Owned-Liquidity for the following reasons:
- Increasing MUXLP pool TVL is essential for the protocol growth flywheel: Higher TVL → Higher Trading Volume → Higher Protocol Income → Faster Protocol Growth.
- Adding $ARB directly to the POL is the most straightforward approach to increase TVL.
- Despite having a 50-70% APR in real yield, the MUXLP pool continues to face headwinds in growing liquidity. Therefore, we believe increasing POL is a much more effective way to grow our pool size long term vs adding $ARB incentives to our pool.
- The $ARB airdrop was granted to the MUX DAO, the governor of MUX POL. Since increasing POL can help to grow governance token holders’ income share, adding the airdrop to POL aligns the interest between protocol governors and protocol growth.
- By holding the airdropped $ARB tokens in the POL, MUX can become a more prominent delegated governor as a protocol in the Arbitrum ecosystem.
- Community discussion surrounding this proposal
- Community members vote to approve/disapprove this proposal