Increase the trading liquidity limit in the ICHI pool from 1M BNT to 2M BNT

TL;DR

• This proposal seeks to increase the trading liquidity limit from 1M BNT to 2M BNT.

• The ICHI liquidity on other liquidity sources justifies the increase.

• ICHI to Deposit 30k ICHI ($1,344,000 at time of writing) from the ICHI Treasury into the Bancor protocol pending ICHI Governance approval

• Pool volume and fees accrued are presented.

• Increasing the pool’s liquidity will improve price impact and help direct more volume to Bancor.

Background & Rationale

• ICHI was whitelisted on April 26th, 2021 1 with an overwhelming response of 51% quorum and 97.41% for votes.
• ICHI trading liquidity limit was increased to 350k BNT on June 10, 2021 with 54% quorum and 99.85% for votes.
• ICHI trading liquidity limit was increased to 700k BNT on August 18, 2021 with 41.48% quorum and 91.2% for votes.
• ICHI trading liquidity limit was increased to 1M BNT on February 2, 2022 with 49.08% quorum and 100% for votes.

Since the most recent trading liquidity limit increase, ICHI released a new product to its suite of Uniswap v3 liquidity management - HODL Vaults!

Since their release, ICHI has already launched its first HODL Vaults, locking in over $10M in TVL in the two weeks. HODL Vault partners include Gnosis, Nexus Mutual, and Celsius.

Trading Liquidity Limit Increase Justification:

With the recent release of ICHI’s HODL Vaults and its 4x price increase, Bancor has been able to continue to grow its TVL through the market downturn. ICHI currently provides a 22.4% APY to this pool via xICHI rewards. With only 19,697 of ICHI able to be deposited, an increase in trading liquidity limit to 2M BNT will enable:

1. ICHI to deposit 30k ICHI to the Bancor protocol.
2. Additional ICHI holders to deposit ICHI to Bancor protocol.
3. Bancor to strengthen the partnership with ICHI and continue to grow TVL.

Liquidity

The ICHI pools with deepest liquidity in Ethereum DEXes are:

The oneUNI / ICHI 1% Uniswap v3 pool with $27.10m liquidity [1].

The ICHI 0.3% Bancor v2.1 pool with $12,159,707 liquidity [2].

The ICHI / wNXM 0.3% Uniswap v3 pool with $5.70m liquidity [3].

The ICHI / GNO 0.3% Uniswap v3 pool with $5.32m liquidity [4].

The ICHI / WETH 0.3% Sushiswap pool with $4,429,479.02 liquidity [5].

The ICHI / ETH 0.3% Uniswap v3 pool with $1.06m liquidity [6].

The ICHI / USDC 1% Uniswap v3 pool with $857.39k liquidity [7].

The extra liquidity would bring the total pool liquidity to at least ~$13.5m if the space in the pool is filled.

Figure 1 - ICHI Weekly Volume since the beginning of August 2021.

Figure 2 - ICHI Weekly Fees since the beginning of August 2021.

FOR

Increase trading liquidity in the ICHI pool from 1M BNT to 2M BNT.

AGAINST

Keep the trading liquidity in the ICHI pool at 1M BNT.

[1] https://info.uniswap.org/#/pools/0x6dedf50966dbef7c5dec3607debe118f28b6bf33

[2] https://etherscan.io/address/0x4a2F0Ca5E03B2cF81AebD936328CF2085037b63B

[3] https://info.uniswap.org/#/pools/0x0002e63328169d7feea121f1e32e4f620abf0352

[4] https://info.uniswap.org/#/pools/0xa5a4adaf57988a96e40a1a96f588455669f025b4

[5] https://analytics.sushi.com/pairs/0x9cd028b1287803250b1e226f0180eb725428d069

[6] https://info.uniswap.org/#/pools/0x275ef1031161d9358a7a35d5028f9d03845d4f2d

[7] https://info.uniswap.org/#/pools/0xf2c055823dd744234694815c6c42f2956191ce1f