[TFIP-14] Providing Onchain Liquidity

Abstract

Deploy protocol-owned liquidity to improve TRU’s onchain liquidity via establishing Liquidity Multisig owned by the DAO. This proposal when executed:

  • Sends 50M TRU to the Liquidity Multisig
  • Binds signers to deploy TRU into AMM

Motivation

TRU liquidity on DEXs today is worse than its peers. Providing significant liquidity onchain increases credibility of the project and removes friction for onchain traders and users.

Details

  • The assets on this multisig belong solely to the DAO.

  • The signers are directed to operate within boundaries of this proposal and assets can be used only to provide market liquidity.

  • Only assets allowed to be held on the multisig are TRU, USDC and AMM LP tokens, representing TRU/USDC pair.

  • All assets must remain under control of the multisig or sent back to the DAO Treasury, it is not permissable for the funds / liquidity (LP tokens) to be sent outside of this multisig wallet unless directed otherwise by the DAO proposal.

  • Unused positions can be withdrawn by the multisig and re-used or kept idle.

  • All signers are doxxed to TrueFi Foundation Board.

  • Exact decision making regarding the specific ranges to be covered and amounts provided are being handled by the signers. Probable, example strategy would look like this:

    70% allocated to Uniswap v3 (Ethereum Mainnet) in multiple one-sided positions above the current market price up to ~$1.20 per TRU. 30% would remain available for Liquidity Multisig to cover more price ranges in the future.

  • Multisig will execute on any future proposals that would direct it to further extend the scope or return all assets back to main treasury.

Multisig Details

Signers: Wallfacer Persons (2), TrueFi Foundation Board Member (1), Community Members (2)

Thresold: 3/5

Addresses:

  • 0xa26980b8291c5799811B24EB753748A1faCE1475
  • 0xc8A69971DAa3C3ADd85Ab0d0AF297515769ddfFC
  • 0x46dFcBc2aFD5DD8789Ef0737fEdb03489D33c428
  • 0xF71e13844D06263D9B13E41385639075c41dAaA5
  • 0x23af6b936e929E9Ae5473b376d199ce45B67b34f
2 Likes

Hello!
I would like to clarify a couple of questions:

  1. Have you analyzed how much liquidity there is in this pair now?
  2. Why did you choose this particular pair? Why not to TRU/ETH?
  3. Why is exactly 50 million TRU necessary?
1 Like
  1. Yes, as of today there is only 0.8M TRU and 25k USDC on Uniswap liqudity., 2.5M TRU and 35 eth on ETH/TRU pair. There is some liquidity on Sushi but that one has lost much of its credibility and is under constant governance attack.
  2. It is possible that the proposal contstraints for liqudity multisig went too far with specyfying USDC only and should allow ETH too, thank you for your input! Ultimately, liqudity multisig would make the decision. If you have opinions here then they are more than welcome!
  3. The idea is to provide liquidity both on Mainnet and potentially on L2s in the future (Base) while still not utilizing the whole 50M but rather gradually add liquidity and observe the effects.

Thank you for the proposal @kaimi!

I am generally in favor of the protocol making use of its capital and I think provisioning liquidity in DeFi makes sense. Putting liquidity into AMMs provides a service to the market, increases TRU liquidity and volume, and also allows the protocol to gradually and automatically liquidate some TRU for stables and/or ETH as the price rises.

One change I would recommend to the proposal is to increase the representation of TrueFi Foundation Board Members from 1 to 2, and remove one signer from either Wallfacer Persons or Community Members. I think this would make sure that the board, which is elected by TRU holders, has an appropriate level of oversight.

Overall I support this proposal.

1 Like

@rafaelcosman @cp0x your engagement / suggestions are helpful, I will include them in the onchain version of this proposal. Thank you.

1 Like

Thank you very much @kaimi!

I also wanted to mention that I see a lot of value in having @WallfacerLabs being a part of this multisig. Because of their work with vaults.fyi (among other projects), they have a very good sense of where the best opportunities across DeFi are, and where the protocol could be deploying liquidity for maximum benefit.