[DISCUSSION] What are the next steps for liquidity?

👩‍⚖️ Governance
#1

What are next steps for liquidity?

On February 25th, ~3.75% of the Radicle token supply was made available for interested parties within the Radicle community. It used Balancer a decentralized exchange and leverages a mechanism called Liquidity Bootstrapping . This event allowed anyone to acquire RAD for USDC.

Over 1800 new token holders participated in the event, claiming over 50% of the RAD tokens put on Balancer at the beginning of the event. This event raised ~$25M in the Radicle Treasury, a smart contract controlled fully and transparently by Radicle token holders.

The event has now successfully concluded, but there is still a lot of interest in trading RAD. While over $200k of liquidity has been added to a community RAD/ETH pool on Uniswap, there is very little liquidity on other decentralized exchanges.

The reason that a team-led liquidity pool hasn’t been created is because the core team does not control the funds raised by the LBP and/or the funds in the Radicle Treasury. Therefore, any proposed liquidity provisioning from the Radicle Treasury of LBP funds must be voted on via an official proposal.

There is already a community discussion on using the remaining balances from LBP to add liquidity and an official proposal is in the works.

Meanwhile, a core team member has created a Snapshot poll outlining an immediate short-term solution to unpause swapping on the Balancer LBP pool. Since the Balancer pool weights have converged to 50/50, this pool could effectively function as a regular DEX, as opposed to an auction (like it did during the 48hrs of the LBP event). This pool is not controlled by the governor, so unpausing the pool is a decision that can be made via off-chain governance.

Community members are encouraged to vote in this Snapshot poll and contribute to the formal discussion here so this can be moved through the official governance process.

Thanks! :seedling:

7 Likes
#2

Proposal to use remaining LBP tokens and ~25mi USDC raised from it as liquidity on DEXes (SushiSwap, Uniswap, Balancer).
Bringing good liquidity to $RAD will raise awareness to the project and by doing that we can grow our community and radicle itself.
Note that speculation comes with development, some may see it as evil but it’s necessary to the success of every company/project.
From vinmid

2 Likes
#3

@abbey whats the dynamic and difference between Polls on Snapshot vs. Proposals on Sybil?

#4

Why is this proposal not being voted on?

4 Likes
#5

@dhejrdlf1, because if you refer to the Governance Guidelines, a proposal needs to have a formal discussion before being escalated to an official proposal.

“Official” proposals are only voted on through an on-chain interface.

You can consider this thread as an attempt to bring @vinmid’s proposal to life through the formal governance process as it’s something that the core team would like to push forward as well :slight_smile:

#6

Snapshot is for gathering off-chain sentiment around a proposal to see if it has enough community buy-in to be escalated to a formal proposal.

“Official” proposals (the ones voted on through interfaces like gov.radicle.network) are on-chain and executable code, whereas Snapshot proposals can be polls that can be used to drive the creation of an official on-chain proposal.

1 Like
#7

How long will the on-chain vote last?

#8

All official proposals are subject to a 3-day voting period.

1 Like
#9

Is it more efficient to direct the funds to a single pool (e.g. Uniswap), or to split them between a few exchanges? If the existing balancer pool is restarted, is there actually any reason to move the funds to another pool?

#10

Excess liquidity is not necessary at this stage.
Excess supply will only adversely affect the price.
Do you want more people to own tokens?
Take into account the participants in LBP.
$RAD is not even listed on the major exchanges and the price is high.
It will be obvious what will happen.
Are there any LBP participants who would agree to this?
I don’t understand.
I am supporting this project and its products, but before that I am an investor.

1 Like
#11

Why is there no discussion how doing this helps with the goal of p2p git? It just seems to be a bunch of people angling to get more tokens.

5 Likes
#12

It would be more efficient in terms of slippage to have it in one pool, especially if there is not a lot of liquidity. However, having two pools would allow arbitrage between the two. A very important ingredient for automated market makers.

#13

Its possible that LPs might actually operate at a loss due to impermanent loss though. If a vote for using treasury funds for LP is unable to pass, maybe RAD can be traded for LP tokens or something to that extent as a way to incentivize people to pool their tokens. If our priority is liquidity that is.

#14

Looking at this from another angle: how much liquidity would be a good number? There’s $800k in uniswap right now. The people that voted for opening up the pool again represent $10 mil (TEN MILLION DOLLARS) worth of holdings. (They could just do the liquidity themselves…)

How much liquidity does the project need for it to help the goal of p2p git?

2 Likes
#15

Good question, this also might be the kind of thing that sorts itself out over time haha. Maybe our best option is just to wait.

1 Like
#16

It appears that there is already a Uniswap RAD-ETH pair with over 35,000 Radicle. I think there is no reason to vote against this proposal, as more liquidity is always better than none

#17

@yoitsyoung :

more liquidity is always better than none

Well, along those lines then, should we go into the treasury and do even more liquidity if it is so great for the project? How about 99% of the treasury? If not, why not? Why the arbitrary number of what happens to be left over from before?

I still haven’t seen anyone state how much liquidity is appropriate nor how this furthers development of p2p git. It just seems to further the interests of token traders more than anything.

#18

We cannot simply tell it and that’s why you have never heard. Enough liquidity supporting a 10 or 100 thousand $ equivalent token swap is always welcome of course.

I saw some people have been saying that adding liquidity will lead to speculative moves and it is not appropriate for this project. I am 100% against such comments, which those guys really don’t understand what “liquidity” really means and why it is essential for the healthy & stable operation of the project. Main function of “liquidity” is to mitigate risk. Without enough liquidity, indeed, that leads to the speculative move.

#19

How does enabling $100k liquidity moves help make p2p git?

3 Likes
#20

Definitely seems like the best option. Treasury funds should be directed to operations that help further the goal of p2p git. LP incentives is literally only good for “number go up”. It ultimately doesnt serve much useful purpose to helping the end goal of the project.

Personally speaking I think the best option other than waiting is to use the remaining balances from LBP to add liquidity. That makes more sense that allocating treasury funds which could be put to 1000 more useful purposes.