VSP#5: Allocation of VRSW to liquidity provision

DAO Proposals
1

VSP#5: Allocation of VRSW to liquidity provision

Proposal Summary:

This proposal aims to establish that sufficient liquidity in VRSW will be maintained in VirtuSwap DEX and possibly additional DEXes. Thus, this proposal ask to allocate up to 5% of total VRSW supply (i.e. 50,000,000 VRSW) that is controlled by the VirtuSwap DAO to provide liquidity in VRSW pools on VirtuSwap and possibly additional DEXes in the future.

Motivation:
This proposal aims to allow VirtuSwap DAO to increase and maintain the liquidity of VRSW pools on VirtuSwap, which will benefit all parties desiring to transact in VRSW (investors, liquidity providers receiving VRSW rewards, VirtuSwap DAO members and general hodlers of VRSW). Higher liquidity in VRSW is expected to increase the value investors assign to their VRSW holdings, enhancing the DAO’s ability to incentivize liquidity provision in selected VirtuSwap pools, and ease any potential risks of insufficient liquidity.

Specifications:

It is proposed that up to 5% of VRSW total supply (i.e. 50,000,000 tokens), that is controlled by VirtuSwap DAO, will be allocated to DEXes liquidity pools.

The provision of liquidity by VirtuSwap DAO can be done in two ways:

  1. Direct provision of liquidity in VRSW and another asset (USDC,WMATIC, WETH etc) into the corresponding liquidity pool on VirtuSwap (or other DEX) or establishment of a new pool of VRSW and another asset on VirtuSwap or alternative DEX.
  2. Indirect liquidity provision, in the form of transferring (lending) VRSW to a 3rd party, which in turn deposits VRSW with an additional asset into a new or existing liquidity pool. Use of the tokens for indirect liquidity provision by third party must include an initial lockup period of 6 months.

Any economic gains that providing liquidity might produce (in the form of VRSW emissions or otherwise) will be owned by the VirtuSwap DAO.