LEGACY: Liquidity Initiative on Fluid: BOLD-USDC

Initiatives
1

Proposal Overview

One sentence descriptor: harness Fluid DEX to bring more liquidity and more yields to BOLD

Fluid DEX is a DeFi protocol which offers “smart collateral” and “smart debt” features.

Smart collateral means lenders can earn revenues from two sources:

  1. Interest paid by borrowers
  2. Swap fees from Liquidity pools

Smart debt means borrowers also get revenues from swap fees. Revenues from swap fees can be superior to interests, therefore users can be paid to borrow

Thanks to smart collateral and smart debt, bringing incentives to Fluid DEX would attract liquidity and yields for BOLD-related pools.

Usage of the funds received

This liquidity initiative will use allocated PIL to boost the APR on lending and borrowing BOLD/USDC pool. As an example, Fluid DEX already brings rewards for USDC-ETH and WBTC-cbBTC pools

499×587 85.4 KB

In this liquidity initiative’s case, rewards would be in BOLD instead of FLUID and should incentivize users to supply and borrow BOLD and USDC on Fluid DEX.

Impact for BOLD

Two major impacts for BOLD:

  1. More demand as a whole for BOLD
  2. More liquidity for BOLD thanks to liquidity-providing positions

With enough trading volumes plus Protocol-Incentivized Liquidity, borrowers can be paid to borrow. This creates a natural financial incentive which attracts more demand for BOLD.

Even though BOLD is currently not as liquid as other stablecoins like USDC, Fluid DEX is still appropriate to have a positive impact. An example to illustrate this possibility is GHO-USDC pool.

Over a certain period, swap fees from the GHO-USDC pool were superior to borrowing interest rates. This flywheel was temporary, but it can be persistent with PIL from Liquity.

Threshold & Target

There is no minimum amount of BOLD required for this proposal to be delivered (apart from the protocol-imposed minimum for collection set at 500 BOLD/week).

The amount should be flexible, to offer competitive incentives without unnecessarily outbidding.

Example: BOLD-USDC pool at $10 million TVL, and optimal incentives are 15% APR
=> Optimal amount of incentives = $28,846/epoch

Impact Measurement, Tracking and Key Metrics

Metrics

  • TVL in BOLD-USDC pool on Fluid DEX: the objective is to have as much liquidity as possible for BOLD
  • TVL on BOLD-related pools on Ethereum: Fluid DEX must also enhance BOLD liquidity on all DEXes
  • BOLD-USDC Supply Rates and Borrow Rates: they are the key metrics to attract TVL on the pool. It is also a key metric for determining the BOLD incentive amount.
  • Incentives sent: tracking of BOLD amounts sent to the Fluid DEX pool

Reporting

  • TVL in BOLD-USDC: [Fluid DEX Pool]
  • BOLD-USDC Supply rates and Borrow Rates: Dune Dashboards (upcoming after the pool launch)
  • Incentives amount and APR: Dune Dashboards (upcoming after liquidity initiative launch)

Practical Information

Recipent: TBD

BOLD-USDC is not available on Fluid yet. This proposal was created in anticipation of its deployment and will certainly be modified over the coming days, according to feedbacks

2 Likes
2

I want a bribe. How about 5 percent to liquity stakers. Somebody has to get the wheel rolling on this. There is zero awareness online that holding liquity token can get you yield through the already live bribing mechanism. Also I am curious to see how this would affect the votes i.e. how liquity stakers will react.

3

You see the protocol only from the point of view of LQTY holders, and have absolutely no consideration for all the other actors involved.

2 Likes