Proposed Journey: Please include a one line description (tl;dr)
Deploy 8M COLLAB (~40k USD) of single-sided COLLAB liquidity (above current price) at 1% fee tier to capture anticipated buy pressure to build DAO protocol-owned liquidity
Please explain how this Journey will help further the above Orientation:
single-sided liquidity deployment will allow us to capture the underlying asset from selling into a buy wave as price moves into and through the range we deploy to through Uni v3. ETH value captured will allow us to level up and provide dual-sided liquidity in larger amount to support the DAO goals in the next round.
What makes your Fellowship well-suited to execute this Journey?
we meet and work as part of the Collab.Land team
Please list the critical milestone(s) that should be tracked to determine if you should receive your grant in one year:Critical milestone(s) demonstrates the proposal has been executed (a clawback is possible for failure to execute on critical milestones)
How should token delegates measure progress along this Journey:
Benchmark Milestone 1 (please include expected completion date for each)
8M COLLAB deployed to pool on uni v3 - Dec 3, 2023
Benchmark Milestone 2 (please include expected completion date for each)
Expiration of timed experiment (January 1, 2024) or completed asset reallocation from price movement through deployed range
How should DAO Pass holders measure impact upon completion of this Journey?
KPI 1
Amount of ETH held in the multisig at end of experiment
Breakdown of Journey budget request:
8M COLLAB to deploy in uni v3 pool range $0.01-$0.21 even deployment across range at 1% fee tier
no funding requested for Fellowship
I confirm that my grant will be subject to clawback for failure to execute on critical milestones: [Yes/No]
Yes
I confirm that I have read and understand the grant policies: [Yes/No]
Yes
I understand that I will be required to provide additional KYC information to the Collab.Land Co-op Board to receive this grant: [Yes/No]:
Yes
Hey @iSpeakNerd, I really appreciate this proposal and is highly due IMO,
can you elaborate on how it will be deployed and add more info on the mechanics?
Hey @iSpeakNerd, did I get it correct? you are providing single-sided liquidity, like how its documented in UNI v3 to the price range $0.01 - $0.025?
If yes, you are effectively market-selling 40K COLLAB tokens, potentially removing any upward pressures. I assume you are not dumping all of the tokens at once into the pool as I suspect your COLLAB-WETH pool wont be able to handle such a volume, considering the current $51.79K and minimal daily volume.
Please provide more detailed information for us to make an educated decision before it’s going to a vote.
66% increase to reach bottom of range so has no effect unless there’s sufficient demand to move price into range. if such demand exists, the DAO should benefit from it by providing liquidity.
Great Concept as Protocol owned Liquidity(POL) needs to be built.
A couple of points to consider.
Reposition?
How much COLLAB to sell at what price
Concentrated liquidity at what range?
Alternatives to building POL
First being able to reposition the collateral as different events occur should be required. For example new announcement could come into play and then make the DAO and token more valuable so being able to reposition as needed. Alternative is to set a range you would be happy with in all scenarios. but what price?
What price?
Concentrated liquidity(CLIQ) could be thought of as a way to capture all the fees and volatility up until a place where you are willing to exit a position.
In the current prop the preference of the DAO is to have WETH instead of COLLAB at an average price of $.0175 valuing the block of 8MM at $140,000 of WETH. If someone came to the DAO with a similar token swap offer would the DAO take that offer?
Another way to play with idea CLIQ is to put the entirety of the DAO’s tokens in a single CLIQ pool and figure out an exit position. let’s say you want to exit the entire DAO treasury for $100MM you could place a CLIQ range position from the current price point to ~$2.5 now the DAO on the entire way up could capture % fees along way. but at what range?
What range?
So the main question is down to the range and how much counter party asset does DAO need at what price point.
The proposed CLIQ position:
values ~10% of the treasury at $200k but would receive $140k
assuming an exit value of 6.25MM marketcap.
the position would realize an impermanent loss of ~60k vs. just making a 1 tick position at $.025
to make up the IL in fees you would need ~6MM in trading volume or trade through the entire position 30 times at a 1% fee.
So any other alternatives?
A couple alternatives
Some other ways for consideration are TokenSwaps, OTC trades to avoid impermanent loss
or
veDexes to leverage the marketing and network effect of being listed and playing the voter escrow game.
on the current prop I would recommend:
the highest fee structure
a larger range at a comfortable exit position
find a token swap partner at sustainable price to pool with and play other pooling games.
Ty for this prop. I do think .21 is realistic as many believe the current prices to be bearish.
The only nuance I would add is widening the range and using time to limit selling. I don’t have particular portions or prices in mind but I’d like to discover over a longer period of time.
I think selling some now, some in 6 months, some in 12, 18, 24 months will help us find a fairer market price and shows our commitment to improving the co-op and utility over the longer timeframe too.
eg. When the price is above our min we sell 2 million max per 6 months.
I missed the chat when this may have been brought up and if this overcomplicates things then that’s cool.
thanks for your input, this prop is less about selling and more about capturing fees from trading activity, either buys or sells within the stated LP range.
the only way it’s a full sell is if we blow through the entire range (I don’t think we will, there’s a large position ~$0.05 from community) and subsequently withdraw liquidity (as ETH) when price is above $0.21
price of $0.21 would put fully diluted mc at $210M which is ~200x from current.
This proposal is currently written as a market dump of collab tokens, within a specific price, which I’m totally against. I clearly understand the motive behind the proposal and the strategy. so…
Methods to improve the proposal IMO are
How will the ‘‘dump’’ be mitigated in the short to medium term?
why isn’t the accumulated wETH, added back to the pool in a concentrated manner?
I think this part of the ghostwriter comes from the community airdrop, which should belong to the community, so the ETH harvested by liquidity should also belong to the community and enter the pool
I don’t feel this is safe to have a multisig with two person that take the same flights & car often. @james@damaderoca, would you consider adding @iSpeakNerd@Chibi and maybe me? Thanks!
Ho yeah and make it 3/5
