Also, I created a formal discussion around Next Steps for Radicle Liquidity so we can start moving this through the official governance process. A reminder that all proposals need to start as formal Discussions on the forum first!
Having enough liquidity on DEXes allows new people to join this community if they wish to. It also allows people to leave this project if it doesn’t turn out to be what they were hoping for.
Not all of the treasury funds have to be used for the liquidity pool, but I believe it would be worthwhile to add enough to allow people the freedom to come or to go. It’s in our best interest to make this project as open to everyone as we possibly can.
All of the above require deep liquidity for RAD trading pairs. Do we really expect recipients of grants from the radicle treasury to lose significant percentages of their grants to slippage ($100k does not seem like an unreasonable size for a grant…)? Do we expect the purchase of even a few hundred domain names to result in a double digit percent increase in the Uniswap price? Both seem unacceptable to me.
Voted +. Very Nice idea, suppose that more liquidity brings more holders from other pools.
And Fees from liquidity could be used by core team they deserve the best and should work alot to make Radicle better.
Exactly. While everyone talked about providing liquidity to the pool, very few talk about the following two aspects:
Impermanent loss on a 50/50 pair
Strategic hedging to lower RAD exposure
The two points are counterarguments, so there is an interesting dynamic here:
Assuming to provide liquidity for RAD/USDC a significant price increase of RAD denominated in USDC would lead to Impermanent loss in the short term. The pools RAD share would decrease due to demand and its USDC share would increase. While the overall USDC value of the pool doesn’t decrease, there is an opportunity cost here.
Strategically, the treasury is overexposed to RAD at the moment. There could be an effort to select the pairs for liquidity providing and hedging the treasuries assets. Instead of putting all available token from the LBP into RAD/USDC, we could put them into:
just as an arbitrary example. In that example the hedge would expose us to Bitcoin, Ethereum and USDC. I think this could build some resilience with regards to the risk of the RAD price dropping.
Ya. I’m not too concerned about that, I just want libre p2p git.
I thought adding to the pool may help with the liquidity complainers, but I’m not sure if that’s who we even want as token holders. It will be a very different community if it is all held by Linux lovers vs. a bunch of token traders.
Another downside of being in the pool is I can’t proxy my RAD votes to a delegate.
I am opposing to this proposal and will support fully for distributing for LBP contributors discussed here. The reason is that it is too early to put RAD on additional DEXs. If adding it to other DEXs now, there are more people looking for quick money and it doesn’t help the community or the ecosystem at all. This project is DevFI. Instead it should distribute to LBP contributors and lock the distribution. I believe that it will lead many contributors involve more and become long term supporters.
Official team should not do this just yet. People can always choose to put their tokens on Uniswap as they wish, but official team should wait till the economic model completes and RAD starts to circulate and support the ecosystem. Until then, Rad should not be speculated.