Summary

An equivalent amount of $SOS will be transferred from the OpenDAO Treasury to the Operational Budget wallet. The received $SOS will be exchanged for ETH to be used to create new markets in SOSMarket.

Proposed usage of funds

1. Funds for market creations

Some funds will be used to create more markets.

The purpose of this is to provide more accurate and extensive information for forecasting and to create time-sensitive markets that users will find useful.

Of the requested budget, an average of 5 ETH will be allocated per market creation and the rest will be reserved for additional liquidity for popular markets.

2. Liquidity providing

Some funds will be used to add liquidity to popular markets.

Liquidity is crucial for users to be able to enter and exit markets. The more liquidity there is in a market, the less impact each transaction has on the price of shares. The price stability will allow users to participate actively in the prediction market. A more liquid market also tends to be more attractive for large market players.

3. Market ends

When the market resolves the ETH can be returned, plus the fees earned from providing liquidity, minus the gas fees paid. With proper management and decisions, this ETH might be able to seed this SOSMarket for a long time.

Benefits to the OpenDAO

Creation of time-sensitive or controversial content on SOSMarket will increase participation and bring streams of new users. Increased participation will directly result in better forecasts of each market.

Every trade on SOSMarket will take a 2.5% fee that is allocated to the $veSOS staking pool.

Profits from SOSMarket

As of Jan. 28th, 2022, all of the incoming ETH in our operational treasury right now is generated from the SOSMarket.

The SOSMarket which is a new product has currently collected 1.02859678 ETH worth of revenue to purchase $SOS tokens from the market to reward our $veSOS stakers.

With this proposal, we expect to see exponential growth in the revenue generated.

Link to document.