Governance Proposal 25: Leveraging POL to Improve Operational Efficiency

Context/Background

The ApeSwap team of Core Contributors are proposing formal changes to the current usage of Protocol Owned Liquidity (“POL”) generated from ApeSwap Bills. Since the inception of BANANA Bills, we have sold discounted BANANA tokens in exchange for approximately $750,000 worth of LP tokens, which has remained as POL to deepen our BNB Chain DEX liquidity. The problem is, this POL has not been optimally beneficial to the operations of the DAO.

As a result, ApeSwap is proposing to take a portion of the POL raised from BANANA Bills and use it for funding operations going forward.

Summary

Going forward, the ApeSwap DAO proposes that 10% of all POL raised through the sale of BANANA Bills is utilized to fund operational expenses for ApeSwap. The LP tokens that make up this 10% of POL would likely be broken apart, so that the underlying assets can be used to pay operational expenses.

This change would not be retroactive, meaning that all POL generated prior to this governance proposal would remain untouched.

Note that this change would not apply to BANANA Bills purchased with LPs that include BANANA as one of the input tokens (e.g., BANANA-BNB LPs). In other words, the full amount of POL raised through BANANA Bills purchased with LPs that include BANANA as an input token would still be held in the ApeSwap Treasury, with no 10% withholding for operational expenses.

Motivation

ApeSwap does not and will not stake any POL from Bills to earn BANANA, so we can ensure the DAO is not extracting BANANA rewards meant for users. Additionally, while the POL does passively generate trading fees, these trading fees have not been enough to counteract the impermanent loss due to market volatility over the most recent months.

By changing how we allocate a portion of the POL, we can more optimally use the funds raised through BANANA Bills, while still having the majority contribute to BNB Chain DEX Liquidity.

Options

PASS - If this proposal passes, 10% of all POL raised through the sale of BANANA Bills, excluding those Bills that are purchased with LPs that include BANANA as an input token, will be set aside to be used for operational expenses for ApeSwap.

REJECT - If this proposal is rejected, no change will be made to the usage of POL raised through the sale of BANANA Bills.