Unlock Protocol

Proposal to Deploy ETH Protocol-Owned Liquidity (PoL) via ICHI Vault and Uniswap v3

Overview This proposal recommends that 90% of the ETH Protocol-Owned Liquidity (PoL) bridged to Base be deployed into an ICHI single-sided vault (0xF349Fa49651d5ae67771B61840c4CCC7a2565764) as 100% ETH, while 10% be allocated to a full-range position in the Uniswap v3 ETH pool on Base. This deployment is contingent upon the passing of the linked Unlock DAO proposal.

Proposed Allocation

1. 90% in ICHI Vault (100% ETH): The majority of the PoL would be deployed into the ICHI vault, leveraging its automated liquidity management tools and capital efficiency.
2. 10% in Uniswap v3 Full Range Pool: A smaller portion of the PoL would be allocated to the Uniswap v3 pool to maintain broad liquidity availability and support ecosystem growth.

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Why ICHI Vaults Are Favorable

1. Automated Liquidity Management:
   • ICHI vaults provide automated rebalancing and optimization, reducing the operational overhead associated with manually maintaining positions.
2. Impermanent Loss Mitigation:
   • A single-sided vault with 100% ETH minimizes exposure to impermanent loss compared to traditional LP strategies.
3. Fee Revenue Maximization:
   • Concentrated liquidity strategies in ICHI vaults generate higher fees per dollar deployed, improving the overall yield on the PoL.
4. Improved Capital Efficiency:
   • Deploying ETH through ICHI enables the DAO to achieve greater liquidity depth per dollar compared to full-range manual positions.
5. Scalability and Flexibility:
   • ICHI vaults are built for seamless scalability, making it easier for the DAO to adjust deployments as needed with minimal manual intervention.
6. Sustainability of DAO Operations:
   • The yield generated by the ICHI vault supports sustainable DAO operations, aligning with long-term treasury growth goals.

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Conclusion

Deploying 90% of the bridged PoL to the ICHI vault ensures efficient and sustainable liquidity management, while the 10% allocation to Uniswap v3 maintains ecosystem alignment. This approach optimally balances operational simplicity, yield generation, and ecosystem support.

If you have any questions you can direct them to discord- ichi_nik or TG - nik_so_lo