Proposal: Increase Co-investment Limit to 1M BNT on Quant (QNT) Pool

This proposal is expected to appear on Snapshot for voting on [date=2021-11-14 time=12:00:00 timezone="UTC"]. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

TLDR

• This proposal seeks to increase the Co-investment limit to 1M BNT for the $QNT pool from the current 500K $BNT co-investment.
• It will open up space for LPs on the TKN side ($QNT) and increase the depth of the pool as LPs add liquidity
• A larger $QNT pool will attract more trades from aggregators and professional market makers to Bancor which ultimately leads to more fees for our platform.

For

1. A larger co-investment limit on the pool will let LPs provide single-sided liquidity and will lead to an increase in pool depth
2. More liquidity in the QNT-BNT pool should lead to larger volume from DEX aggregators and professional market makers sent in our direction
3. More volume for Bancor leads to more fees for our platform and $BNT holders

Against

1. We should not increase the limit on the pool.

Abstract There are currently ~627.5K $BNT and ~10.7K $QNT tokens in the BNT-QNT pool. This has resulted in a pool that has roughly ~5.5M in liquidity. At the moment, LPs on the TKN side ($QNT) can’t provide single-sided liquidity since there is no capacity. This proposal seeks to increase the $QNT pool's single-sided capacity by increasing the Co-investment limit to 1M $BNT.

Motivation

If we want to attract more QNT LPs to Bancor, we need to open up space in the pool so that they can provide single-sided liquidity. This would allow us to grow the liquidity in the pool and attract larger trades towards our platform which ultimately results in higher fees for Bancor.

The top pool for QNT is on Uniswap V3 and it is paired with ETH. Pool depth is roughly ~5.44M and we should be able to make the Bancor pool deeper to support larger trades with low price impact:

Currently, the Bancor pool has no space available and LPs can’t provide single-sided liquidity on the TKN side (QNT). I am proposing a 1M Co-investment limit for the QNT pool which should open up roughly $2M in additional single-sided liquidity (assuming BNT price at $4.00). If this pool fills up completely, we would have a pool that’s roughly ~10M in depth and be more competitive with the Uniswap V3 pool.