Silo

What are you voting on?

• Authorize the core team to use up to $3.2M of the development fund to seed XAI liquidity in the XAI/USDC Uniswap V3 pool and XAI/FRAX/USDC Curve pool.

• Stop voting for CRV emissions to SILO/FRAX Curve pool. This means SILO/FRAX will receive no rewards as early as the next voting cycle.

• Authorize the core team to control SiloDAO’s vlCVX.

Rationale XAI is now the second bridge asset in the protocol alongside ETH. Borrowing XAI generates revenue for the SiloDAO and therefore the DAO is motivated to dedicate resources to generate demand for borrowing XAI.

In other words, Total Borrowed XAI becomes our North Star metric.

Equally important to building borrowing demand for XAI is growing XAI’s liquidity on-chain. Deep liquidity helps maintain XAI’s soft peg and ensures smooth liquidations. To that end, we can use the SiloDAO’s holdings of USDC and vlCVX (~260K) to achieve 3 purposes:

• Ensure smooth liquidations.
• Motivate users to borrow XAI.
• Attract borrowed XAI to the liquidity pool.

With regards to the DAO’s vlCVX (~260K), the proposal gives the Core Team full control over the use of vlCVX. Initially, we will use the vlCVX as follows:

• 130K vlCVX for XAI/FRAX/USDC Curve pool
• 130K vlCVX for SILO/ETH Balancer pool We can maintain the above distribution for the next 30-60 days and revisit its impact on XAI’s borrowing volume and onchain liquidity depth.

Summary of ongoing initiatives Passing this proposal is essential to carry out the following initiatives:

1- Obtain a Curve gauge for XAI/FRAX/USDC pool. The request is live now on Curve’s gov forum and will be promoted to a gauge proposal soon.

2- Obtain a Frax gauge for XAI/FRAX/USDC pool. We will request the gauge once the above initiative has succeeded. With both Initiatives succeeding, LPs in the XAI/FRAX/USDC pool will receive double rewards: From SiloDAO and the Frax team.

3- The core team will deposit up to $1.7M USDC of the development fund to borrow up to 1.5M XAI from the USDC silo. We will then use an additional 1.5M USDC to seed a XAI-USDC Univ3 pool with up to $3M liquidity. The team will move the liquidity to the XAI/FRAX/USDC pool at one point, establishing one primary liquidity pool for XAI.

Resources Building on-chain liquidity for XAI: https://gov.silo.finance/t/building-on-chain-liquidity-for-xai/309

Introducing XAI: Cross-silos stablecoin: https://gov.silo.finance/t/introducing-xai-cross-silos-stablecoin/305

XAI/USDC Uniswap V3 pool: https://info.uniswap.org/#/pools/0x55bb9904df17f3b07551aa117841b3bbfc66646d

XAI/FRAX/USD Curve pool: https://curve.fi/factory/223