Summary:
The core team proposes a strategic migration of liquidity from the current THX/USDC pool on Uniswap to a new THX/MATIC pool on Quickswap, both on the Polygon POS blockchain. This initiative, effective as of the 1st week of March, 2024, aims to align with the evolving tokenomics and market dynamics, enhancing the protocol’s growth and accessibility. The proposal involves the transition of liquidity assets, specifically 170k THX and 70k USDC to create a more robust and diversified liquidity pool in partnership with Quickswap.
QuickSwap is the #1 decentralized exchange on Polygon for total value locked (TVL) and volume. Uniswap recently announced they had 265k users on polygon in 2023. QuickSwap had 235k in February 2024 alone.
Motivation:
With the protocol achieving early product-market fit, our focus for the second quarter of 2024 is to fortify the token liquidity across two fronts:
- Diversify: Now that we have robust THX/USDC pair on Balancer established, transitioning to a THX/MATIC liquidity pool on Quickswap aligns with our strategic goals to enhance protocol liquidity diversity. The chosen THX/MATIC pairing is expected to provide more reactive liquidity to neutral to bull market conditions as opposed to the more stable THX/USDC pairing. To different pairs on Polygon will also provide more arbitrage opportunities for traders and investors.
- Go-to-Market: This liquidity migration is part of a broader strategy to expand our reach and utility within the gaming community and beyond. By leveraging Quickswap’s user base and marketing reach, we aim to introduce innovative marketing initiatives, including a bond purchase program powered by ApeBond which will be discussed in its own separate topic.
Risks:
Migrating liquidity involves certain risks, including potential temporary impacts on token liquidity and market stability. However, these risks are mitigated by careful planning and execution together with the Quickswap team, ensuring a smooth transition to the new liquidity pool. Next to that there is additional risk involved in MATIC exposure versus the USDC stablecoin.
Specification:
The liquidity migration involves removing the 170k THX and 70k USDC from Uniswap, currently set to the price range of $0.02504 to $0.06012 per $THX, trading the USDC to MATIC on Paraswap and establishing a THX/MATIC pool on Quickswap (technically speaking this will be THX and wrapped MATIC pool or THX/WMATIC). The migration will involve a minimal amount of slippage, currently estimated about 0.24%
Next steps:
First, this proposal will be open for discussion for a minimum of three days. Next, it can be signaled to move to a vote. It then is subject to validation by the @governance-council and when approved will proceed to be posted on snapshot.org for voting. This process is described in the Proposal Workflow.
The responsibility for approving this proposal falls on the THX DAO and will be voted upon by token holders. Upon approval the executing is up to the multisig holders. All on-chain transactions are routine operations performed from the Gnosis safe.
We invite the THX community to provide feedback on this proposal and support our efforts to enhance the protocol’s liquidity, accessibility, and overall growth potential. Thank you for your consideration and ongoing support.
