HIP: 59 title: Provide Liquidity to UBI authors: Green, santi.eth status: Phase 1 created: 2022-08-17 conflicts with: None languages: EN
In order to guarantee more stability to the price of UBI and prevent swings that might bring volatility to the price, the DAO will use its UBI and WETH funds to become a liquidity provider on Uniswap v3, the main decentralized exchange being used to trade UBI.
In order to bring stability to UBI, the DAO can provide liquidity on Uniswap with its funds helping bring more stability to the price of UBI.
The DAO currently has control of 3.8M UBI and 46 ETH (in the form of Wrapped ETH or WETH). By taking into consideration an average price of 0.00000657 ETH per UBI (around $0.012 per UBI with the price of ETH at $1850 at the time of writing this proposal), we recommend creating a liquidity pool that pairs 2M UBI and 13.14 ETH on Uniswap.
This will keep some funds left for the DAO and provide a liquidity around the same levels prior to the removal of funds held by the Kleros Coop.
A sharp reduction in the liquidity available to trade UBI for other assets on Uniswap has seen recently due to Kleros Coop removing its liquidity provision on Uniswap. This has led the unlisting of UBI in exchanges that are frequently used by Proof of Humanity users such as Ripio due to the low liquidity volume that makes the token prone to manipulation.
A trusted Gnosis multisig wallet with two members of the community willing to execute these changes can be set and used specifically for the purpose of this proposal.
We recommend having a member from Kleros and another member from the DAO not affiliated with Kleros to act as co-signers and execute the required actions. This should be a 2 of 2 multisig where both members must sign the transactions for these to be approved.
This will allow the action to be performed with speed during a zoom call and take any necessary actions in case a mistake is made.
We recommend having this wallet already specified on Phase 2
- Setup Gnosis Multisig with 2 of 2 signatures
- Send the funds from the DAO Treasury
0x327a29fce0a6490e4236240be176daa282eccfdfto the approved Gnosis Multisig
- Contribute liquidity to the UBI/WETH pair on Uniswap v3
- Send back the LP tokens from the liquidity pool back to the DAO Treasury.