Use part of our performance fees and of inflation to fund liquidity
This proposal seeks approval to use part of the performance fees and of the inflation to acquire our liquidity and reduce the selling pressure coming from liquidity mining.
Our liquidity currently costs us c.20k SDT per week, which represents an inflation of 0.3% weekly in our total liquidity, i.e. 16% annually. Acquiring liquidity has been an effort during the past months, and the faster the DAO acquires its liquidity, the faster the inflation can reduce.
We have worked intensely to acquire our liquidity over the past couple of months, and today, the DAO owns 12.75% of its liquidity accross Sushi, Uni and Cometh pools. This has been performed thanks to the Olympus Pro bonding program. However, recent analysis showed that our bond program was currently too aggressive and resulting in selling pressure for SDT. Therefore, this proposal suggests bringing the SDT emissions dedicated to Olympus pro to 25k SDT per week (from 50k currently), and redirect inflation to pair the other 25k SDT per week with revenues from performance fees, and pool it in the Sushi LP and Cometh LP. This could run until the total liquidity of the DAO reaches $20m. At this rate, the DAO would acquire $200k of liquidity every month, which is equivalent to the current Olympus pro rate. The two programs combined should enable reaching a good share of the liquidity reasonnably quickly.
We could soon reduce further incentives to Liquidity mining, and save a lot of SDT from their inflation.
This program should be accelerated as the DAO revenues increase.
To bootstrap this program, we could use 100k SDT from the treasury and pool it with the equivalent from our reserves as soon as this is voted.
Acquiring the DAO’s liquidity and reducing selling pressure from liquidity mining.
Part of the performance fees will be put at work rather than distributed.