DAO Sponsored Proposal
If this proposal passes:
- the SPS DAO will reroute all inflation currently being paid (roughly 200,000 SPS per month) for the DEC:USDC pool to the SPS DAO's wallet on the Binance Smart Chain.
- The SPS DAO will also deploy roughly $200k worth of USDC and DEC to the USDC:DEC v3 pool on Pancake Swap with a range between $0.00083 and $0.00104.
- this proposal will greatly enhance liquidity on BSC for DECs while also giving the DAO a source of revenue with very low risk of impermanent loss
Notes: the DAO will also ensure the price of DECs is between $0.00085 to $0.00098 in the v3 pool at the time of adding liquidity. If the price is below, the DAO will buy DECs until $0.00085 is reached, if above the DAO will sell until $0.00098 is reached. This is to ensure the DAO is providing liquidity on both sides, but more so on the DEC side in an effort to conserve stablecoins.
The DAO will be compensated in earned trading fees for providing the liquidity equivalent to 0.77% of the trading fees (0.23% goes to PancakeSwap).
This proposal will significantly deepen liquidity for DECs on BSC as long as the price of DECs are above $0.00083. In the event it falls below $0.00083, there will be very thin liquidity on BSC through whatever user provided liquidity is remaining, but DECs can still be traded efficiently on Hive-Engine.
Benefits
- DAO earns the SPS from renting liquidity for DECs
- Very little risk of impermanent loss for the DAO (we have bigger problems if DECs stays consistently below $0.00083)
- Concentrated liquidity means MUCH less price impact than before
- DAO earns additional income from trading fees (0.77% of volume)