Temperature Check - Should the DVF DAO Add Additional DVF to the DeversiFi & Uniswap DVF Markets Above $10?

Summary: Add DVF liquidity to the DVF/USDT market on DeversiFi and to Uniswap V3 above 10 dollars

BACKGROUND

The DVF/USDt market was seeded on DeversiFi with 50% of the total USDT raised in the DVF DeversiFi Launch Market (DLM), or 1.96m USDT. 197k DVF was also added to the market (roughly equivalent to 0.8m USD at the time). In these ratios the market making service that is run by DeversiFi Labs on behalf of the DVF DAO acted approximately as a simulated 30/70% AMM.

DeversiFi DVF:USDT market:

Recently, the price of DVF has increased substantially, but the DVF side of the market on the DeversiFi DVF/USDt market is relatively illiquid compared to the 50/50 liquidity on Uniswap and Sushi (both of which were also also funded by the DVF DAO following the DLM).

The market making service that simulates the DVF/USDt market on DeversiFi has the following balances (with price of DVF @ 9.9 USDT):

  • USDT: 2.603m
  • DVF: 94.58k

Uniswap V3 DVF:USDT positions:

The DAO owns two positions providing liquidity to Uniswap V3. These are the following:

  1. Uniswap Interface (Range 0.1 USDT to 10 USDT)

  2. Uniswap Interface (Range 0.1 USDT to 20 USDT)

Since the price is currently around the $10 mark, it is expected that liquidity on Uniswap will reduce significantly if the price of DVF rises further, and will stop completely for new buyers at 20 USDT.

PROPOSAL

1. Add 168k DVF to the DeversiFi market

We propose adding 168k DVF to the service in order to change the weightings from the current ~70/30 to 50/50. This will improve the balance of liquidity in the market and enable traders to enter & exit substantially larger positions, particularly if the price of DVF continues to move higher.

This is a temporary solution which bridges the liquidity problem until the launch of the DVF/ETH AMM & liquidity pool on DeversiFi in early december. The DVF/ETH liquidity pool will be heavily incentivised and will enable DVF holders to contribute liquidity to earn DVF rewards.

Once the DVF/ETH liquidity pool launches on DeversiFi, both the DVF/ETH and the DVF/USDt can be accessed by the ‘multi-hop-swap’ feature which gives traders the best possible price from all liquidity paths on DeversiFi when using the swap features

2. Add 200k DVF to a new Uniswap v3 position

We propose creating a new single-sided LP position on Uniswap, with a range of 10 USDT to 30 USDT. This will ensure that there continues to be good liquidity on Uniswap available above 10 USDT and beyond the current maximum available in Uniswap V3 of 20 USDT.

SUMMARY

If the above proposal passes the DVF DAO will then own the following combined liquidity (at the current DVF price of $9.90 per DVF:

  1. DeversiFi DVF/USDT: $3.6m + 168k new additional DVF
  2. Uniswap V3 DVF/USDT $0.1-$9.9: $1.1m
  3. Uniswap V3 DVF/USDT $0.1-$20: $2.2m
  4. Uniswap V3 DVF/USDt $10-30 200k new additional DVF
  5. Sushi DVF/USDT: $1m

https://app.uniswap.org/#/pool/77875
https://app.uniswap.org/#/pool/80022

10 Likes

Sounds good and timing is right, this has my vote.

6 Likes

I’m in full support of this, sounds like a good support plan pending the launch of AMM

2 Likes

I think the proposal is sound. Definitely need more liquidity in the interim before December 1. I would support it.

2 Likes

Not a bad idea temporarily. But hopes this does not go on and AMM starts to be implementing asap.

1 Like

We will progress this to a vote. Thank you for your feedback all!

1 Like

Due to the overwhelming support for the proposal and the non-controversial nature, the DVF has been added to Uniswap V3 and DeversiFi ahead of time.

In the event that the Snapshot proposal fails then the liquidity will be removed

2 Likes