Aavegotchi

Author: Jesse | gldnXross#6482 Gotchi ID: 4563 Discourse Thread: https://dao.aavegotchi.com/t/ghst-liquidity-rewards-on-new-launch-pixelcraft-dao-collaboration/1804

Problem being addressed:

Some community members are worried about the waning liquidity of GHST on Quickswap and their gradually decreasing LP rewards.

View the detailed proposal at the Discourse Thread linked above.

Solution:

Rather than simply allocating more liquidity to the pool, we are considering partnering with a soon to launch liquidity aggregator called DinoSwap. They are currently in stealth mode, but will be live on Polygon by the end of June. While we wait for more details to be made public, we can confirm DinoSwap is backed by known VC funds and launching with a short list of reputable projects partnering in the truest sense (each contributing 200k USD worth of their own tokens to one asset sided pools called “extinction pools”).

Given the problem above, I am proposing that Pixelcraft Studios and AavegotchiDAO each contribute 100k USD worth of GHST to partner with DinoSwap during their launch window. For the $200,000 of GHST tokens provided, DinoSwap will be providing approximately $2,000,000 in DINO rewards over a 3 month period to stkGHST-WETH LPs on QuickSwap.

This particular arrangement offers an asymmetric risk/reward scenario: consider, if the DAO foregoes this and instead puts up 100K worth of GHST as just normal liquidity, then we’ve got 100K more liquidity in an already existing pair’s pool. Not terrible, but not great either.

The opportunity here is that this 100K may lead to much more than 100K in liquidity for a newly bootstrapped GHST-WETH pair. Maybe 1M, maybe 10M, or maybe something much lower. It’s hard to say, but the potential is there, and that’s why this proposition is worth the DAO’s consideration.

After over a month of vetting by Pixelcraft, we believe the upside (big increase in liquidity, potentially valuable DINO rewards for LPs) significantly outweighs the downside (spending 100K GHST for the DAO, 100K for Pixelcraft).

A quick check of https://aavegotchi.com/treasury shows that DAO treasury currently sits near 870k DAI and 515k GHST.

** PROS: **

• Potentially significant increases for GHST liquidity demand.
• Wider exposure of GHST to the fast growing Polygon user base and users of DinoSwap.
• Bootstrapping a new, third major liquidity pair in GHST-WETH.

** CONS: **

• DinoSwap is a new, untested (but audited by Certik) product that may not live up to the hype.
• The $200K in GHST provided is going into an “extinction pool”, which means it will be consumed by yield farmers participating in liquidity mining on Quickswap, in exchange for the new DINO token (whose value is unknown).
• The assorted risks of the unknown and opportunity cost.

Note, Pixelcraft would also integrate FRENS rewards for the GHST-WETH liquidity providers, in order to maximize the LPs participation in the Aavegotchi ecosystem.

The exact percentage of FRENS rewards can be discussed, but given WETH’s volatility it would likely be greater than our USDC rewards but less than the QUICK pair.

In summary, this proposal has:

Pixelcraft Studios contributing 100k USD worth of GHST (taken from our monthly 50K tap allocation) while AavegotchiDAO treasury matches with another 100k USD worth of GHST.

BEFORE voting, I highly suggest reading/joining the Discourse conversation above. I acknowledge, there is nearly zero public info on DinoSwap yet. This is frustrating but also unavoidable because of the nature of the proposal (they are in stealth and we deciding whether to join their launch).

I’ve set the length of this SigProp to 6 days, in the hopes that we can engage in rigorous debate and still have enough buffer for us to complete a potential CoreProp vote in time for DinoSwap’s launch (soft circled for the last week of June).