We have 272.215 $USDC in raised funds remaining from the Token Launch Auction.
The core team proposes to swap this to ETH and deploy the funds on Uniswap using Ethereum mainnet in a Visor FinancePhantom co-managed pool. Visor allows for active liquidity management and liquidity provisioning on Uniswap v3 by managing liquidity ranges for you.
Benefits we see of this set up;
for new holders ; Ethereum mainnet holds an amazing amount of capital looking for opportunities and new projects, a Uniswap Visor managed pool provides much deeper liquidity than can normally be achieved with a ~$550k deployment of funds so will be attractive to new buyers
for existing holders; increased choice in base currencies (ETH next to USDC on Polygon) and more reach on three protocols and two chains
for liquidity providers ; flexibility in base currencies, swap fees and cross-chain arbitrage opportunities
for liquidity providers ; assuming a high correlation with ETH in price, less impermanent loss in 50/50 pools by using ETH instead of USDC
We see the following risks;
for the Community Treasury ; increased exposure to ETH for the treasury
for the Community Treasury ; additional smart contract risk by using Visor
Execution details
To mitigate some of the risk in short term ETH exposure, and to minimize slippage, the core team proposes to âdollar-cost-averageâ into ETH in four daily transactions (68053.75 USDC each) starting on Monday 13th of December.
The discussion will stay open till Sunday 12th December end of day UTC.
How to participate
The core team beliefs the benefits outweigh these risks but since the impact on the Community Treasury potentially is significant, and we value the input from the community, we would like to discuss this in more detail before we proceed.
Please indicate if you agree with this proposal below with a green checkmark ( ) for yes or no with a red stop sign () and elaborate on why and give any suggestions to tweak the proposal.
Not in favor. The only advantage I see is extra exposure to Liquidity. In the long run (maybe I am wrong here) merchants or other users will make use of THX on the Blockchain that is most favourable in terms of cost. That will not be Ethereum, not in many years. Which means, fees will not be accrued on ETH, but rather on Polygon. Governance will be on Polygon. So I do not see any use to switch to Ethereum. If fees would accrue there and governance voted for a payout, part of that would be eaten up by Gas⌠I see no real advantage in that move.
Can you please elaborate on this point? Are there some figures showing that new projects benefit from the amazing amount of capital in Ethereum? How does Visor provide a deeper liquidity?
Check the total DeFi value locked on Polygon TVL - DefiLlama (~$5 billion) versus Ethereum TVL - DefiLlama ($160 billion). Thatâs more than 30x(!) the amount of capital. We all like the low gas fees on Polygon but Ethereum mainnet is still the dominant chain by far.
Second I have some evidence that is more anecdotal in nature from my personal network that small whales are eager to participate in new projects, but that Polygon is not their chain of choice because of the less secure nature of the PoS side-chain. In my opinion, we could be missing new holders bij staying on Polygon only.
There is opportunity cost in idle funds.
Exposure to ETH is not a concern for most; and since the market correlates with ETH quite well, reduces the risk of âcapitol flightâ of pools containing stablecoins.
Most importantly, exposure to âwhere the money isâ, and the potential growth in TXN volume, are attractive factors. As much as arbitrary metrics as TXN volume pain me to admit the significance of, third parties often consult metrics to make decisions.
(Thespis) âAye captain, I be in favor of a new pool to swim in, provided the captains of this ship can afford thee costs associated for THX to gain parlay and build a bigger crew.â
âthere be risks in these waters we be willing to takeâ
Being on Uniswap will make THX appear more legitimate (I know this shouldnât be the case but in crypto many people still view it this way) and importantly more accessible and less niche. As a marketing purpose it makes sense and many projects on other chains have done the same thing.
Oh, to answer the second part of what @coldpresss is asking; Visor automatically narrows and manages the range you supply Uniswap v3 liquidity, making it more effective. See Concentrated Liquidity | Uniswap
Only gas fees are bad in Ethereum/Uniswap Pool, but the exposure that it will bring will outweigh that. A lot of user/partners/project are still in the main ethereum network.
For the time being, there is no other choice, so proceed as planned. Of course, it does not rule out that there are other better uses in the follow-up. My choice is to adapt to circumstances.
Hi @0xScissus thanks for your input. I get your point. Gas fees on Ethereum remain a concern, weâre on Polygon for a reason
Keep in mind that the proposal is to move only 30% of the liquidity and that this decision is easily reversible. At $10k daily trading volume the treasury accrues about $10k in Uniswap fees yearly so that will be more than enough, even after one or two months, to pay for any gas needed.
This taken together with the core team being in favor means we proceed on this proposal. The next four days the USDC swaps to ETH will be completed using our multisig. We keep everyone updated through our Discord and Telegram channels.
) for yes or no with a red stop sign (
) and elaborate on why and give any suggestions to tweak the proposal.
Not in favor. The only advantage I see is extra exposure to Liquidity. In the long run (maybe I am wrong here) merchants or other users will make use of THX on the Blockchain that is most favourable in terms of cost. That will not be Ethereum, not in many years. Which means, fees will not be accrued on ETH, but rather on Polygon. Governance will be on Polygon. So I do not see any use to switch to Ethereum. If fees would accrue there and governance voted for a payout, part of that would be eaten up by Gas⌠I see no real advantage in that move.
