| id | Title | Status | Author | Description | Discussions to | Created |
|---|---|---|---|---|---|---|
| TIP-137 | POL position on Arbitrum using PALM | Draft | Svenska (@svenskafr) | Build a POL position on Arbitrum using Arrakis PALM solution | discord | 2023-04-19 |
This TIP proposes to create a Protocol Owned Liquidity (POL) position on Arbitrum.
Currently, THALES liquidity is distributed between networks such as:
- Optimism: $4.2M
- Arbitrum: $1.1M
With a $10k order on Arbitrum, actual price impact is ~1.8%. With a $100k order, price impact is ~9.6%.
In order to increase THALES liquidity on Arbitrum and reduce price impact on large trades, a POL position will be created.
This new tool will complement the current program distributing incentives to liquidity providers via Camelot (see TIP-125).
In order to reduce price impacts for large THALES trades en Arbitrum, more liquidity is needed there. In addition to current LP incentive program with Camelot, a POL position on Arbitrum can be built to increase THALES liquidity, without spending additional incentives and securing an independent liquidity position for Thales treasury.
Arrakis, current Uni-V3 managing infrastructure protocol used by Thales on Optimism, launched their Protocol Automated Liquidity Management (PALM) product few months ago to help protocols build their POL position (more info).
So far, more than 15 protocols are using PALM, including Kwenta, Gelato, Perpetual Protocol & Premia.
Kwenta has been using this solution for ~2 months and Stargate just voted a proposal to implement it.
Thales treasury can use PALM by depositing 90% gov token (THALES) and 10% base assets (WETH), then with the market making strategy of PALM liquidity is provided while moving towards a asset composition of 50/50 once this is achieved.
Useful information regarding PALM :
- Fees: Arrakis takes a yearly management fee of 1% on the TVL (0.25% every quarter) and half of the trading fees that the pool generates and the protocol using PALM makes the other half.
- PALM presentation: https://mirror.xyz/0x916563f8476b988855af0b8b8A3D56072E1917FA/wC6L4XJdmuBCXNB1XHBGzCbzxIKvVTdiSoSgDqHWF6I
- https://twitter.com/ArrakisFinance/status/1623319923559636994
- https://twitter.com/ArrakisFinance/status/1630632476178776064
This TIP entails the Thales Treasury DAO and Thales Protocol DAO to facilitate the creation of the PALM vault with the Arrakis team and fill that vault with 22 ETH and 675,000 THALES tokens.
PALM autonomously manages liquidity through the vault to support both buy and sell volume and Thales keeps ownership of this liquidity pool.
N/A
TBD
Copyright and related rights waived via CC0.