Cryptex

Dear Community Members,

I want to share a proposal to create a pilot liquidity program. The program aims to create deeper liquidity and help the subDAO earn a yield with its POL on Aerodrome.

Background In June 2024, the subDAO provided approximately $300k in liquidity on Aerodrome. An initial incentive campaign distributed 5,600 CTX over an 8-week period, successfully attracting ~115k in additional liquidity and 120k+ in volume. Additionally, liquidity providers (LPs) received an average of 70% APR in Aerodrome emissions for participating, making this campaign a HUGE success!!

Pilot Program Overview Building on this success, I propose that the subDAO launch another incentive program over the course of a year. The subDAO should allocate $25k from the treasury, split evenly between CTX and USDC, to incentivize the CTX/USDC pool for 8 weeks. The incentives would be distributed weekly, with a cap of 3% of the pool’s total TVL at any time. To ensure sustainability after the incentives end, the subDAO should lock approximately 40-50% of the Aerodrome emissions earned and vote to direct emissions to the CTX/USDC pool. This approach creates a baseline yield for LPs.

The subDAO should receive a revenue share of 10% only after the program has broken even based on emissions distributed to LPs (~$25,000 in Aerodrome token emissions).

A Bit of Math Based on the test campaign, the expected incentive-to-emissions ratio is 1.5. This means that for every $1 the subDAO spends on incentives, the CTX/USDC pool will earn ~$1.5 in Aerodrome emissions. With a $25k incentive program, the expected total return is approximately $37,500 in emissions to the CTX/USDC pool. The subDAO would earn the lion’s share of these emissions due to the large percentage of Protocol-Owned Liquidity (POL) in the pool. Even in a worst-case scenario, with a 50% reduction in emissions, the subDAO can still expect to break even based on emissions and yield from the veAero.

Final Thoughts The goal of this campaign is to generate income using DAO assets. I believe Aerodrome provides a great opportunity to do this. Hopefully, the community recognizes the value and potential growth this can bring to the Cryptex ecosystem.

TLDR:

• The subDAO will run a pilot campaign for 8 weeks with a budget of ~$25k.

• The goal for this campaign is to generate income using DAO assets and secondary goals being to increase TVL for CTX/USDC pool.

• The subDAO will receive a revenue share of 10%. The revenue share is only distributed if a positive return is generated during the campaign.

• At the end of the 8 week campaign the subDAO will share outcomes and results with the greater Cryptex Community.

• Upon a successful campaign the subDAO and community will vote one more time to extend the incentive program for the full 52 week duration.