TIP24 - Build Protocol Owned Liquidity

Tokenlon
  • Updated

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Background

  • Based on Tokenlon’s litepaper, 10,000,000 LON is reserved for liquidity incentive for one year until 24th Dec 2021

  • Phase 7 of liquidity mining will end on 9th December 2021, with liquidity mining lasting for a year. The remaining budget for liquidity mining stands at 2,690,190 LON

  • Current numbers for the two liquidity pools are as follows

    • Uniswap Pool: LON/ETH 3,765,011 LON + 1,489 ETH

    • Sushiswap Pool: LON/USDT 2,298,000 LON + 4,244,000 USDT

Proposal

We would like to propose a Protocol Owned Liquidity for the LON token. This is after taking into account the current LON treasury and trading fees on average. Under this proposal, users will no longer receive rewards for providing LON liquidity.

 

Details of the proposal are in the table below

Pair Token Fund source Initial amount
LON Liquidity reserved 2,690,190
USDT Fee collected per LON pair amount

 

Benefits of this change

  • By focusing LON liquidity in an AMM pool, we improve price discovery and trading depth of LON

  • Under the current liquidity mining scheme, many users receive LON and sell it on the open market. By having the protocol take charge of liquidity, we can prevent the selling pressure of LON and stabilize the LON price.

  • Under the new proposal, the treasury will consist of other tokens such as ETH and stablecoins. In the event of a bull market, the LON treasury will increase in value with these tokens. In bear markets, it will not have a huge decrease in value, giving the team a stronger hedge.

    • This will come from a portion of the fees collected from the platform

Relevant figures

  Statistics Remarks
Multi-Signature Wallet (Treasury)

  • Treasury

    • 1,114,259 LON

  • Remaining Liquidity Mining Budget

    • 2,690,190 LON

 Moving forward, funds from the treasury will be placed in a separate wallet independently

 

Proposed Action Items

Vote for one of the 2 options below to decide on changes to LON liquidity mining

 

Voting Rules

  • Addresses with more than 0 LON or xLON can vote

  • Addresses currently participating in LON liquidity mining or holding the respective LP tokens can vote (including unclaimed LON reward)

  • Voting start time: 2021.12.1 12:30 pm UTC+8

  • Voting end time: 2021.12.3 12:30 pm UTC+8

 

Voting Options

A. Continue with the current liquidity mining

B. Stop the LON liquidity mining from 9th Dec and shift to a protocol owned liquidity

 

Join the Voting

 

If you meet any problems while voting, feel free to join our Discord to contact us.

 

Tokenlon,

2021.12.01

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