Increase Trading Liquidity to 300K BNT on DDX (DerivaDAO) Pool and Set Pool Fees at 1%

TLDR

• This proposal seeks to increase the trading capacity limit to 300K $BNT for the $DDX pool (from the current 100K $BNT).
• It also seeks to increase the pool fees from .2% to 1% since the pool has attracted the most liquidity
• It will open up space for LPs on the TKN side ($DDX) and increase the depth of the pool as LPs add liquidity
• A larger $DDX 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 trading capacity limit on the pool will let LPs provide single-sided liquidity and will lead to an increase in pool depth
2. A higher fee on this pool is warranted since it has the largest depth and will bring more fee revenue to LPs
3. More liquidity in the DDX-BNT pool should lead to larger volume from DEX aggregators and professional market makers sent in our direction
4. More volume for Bancor leads to more fees for our platform and $BNT holders

Against

1. We should not increase the trading capacity limit on the pool or raise its fees

Abstract

The initial whitelisting for DDX is here:

https://gov.bancor.network/t/proposal-onboard-derivadao-token-ddx-plus-100k-bnt-trading-liquidity/3244

There are currently ~92K $BNT and ~81K $DDX tokens in the BNT-DDX pool. This has resulted in a pool that has roughly ~600K in liquidity. This proposal seeks to increase the $DDX pool's single-sided capacity by increasing the trading liquidity limit to 300K $BNT.

Motivation

If we want to attract more DDX 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.

There are currently two pools for the DDX token on Uniswap V2 and Sushiswap respectively.

We have the majority of liquidity on Bancor due to a single DDX whale that filled up the entire pool when the token was whitelisted:

the DDX community was very enthusiastic about onboarding DDX to Bancor but no one got a chance to stake any of their DDX tokens. There is plenty of interest that has been shown from DDX holders that would like to LP on Bancor (some are new that aren't familiar with Bancor) and I think it is a great way to onboard a new community and potentially acquire new LPs for other tokens.

The fee increase is being requested because we have the most liquidity from DEXes and also because if we were to fill this up (I have high confidence that we will) then the liquidity on Bancor will rival that of coinbase (going by their orderbook). I expect some of that trading to potentially make its way to Bancor if that happens (you can find complaints on Twitter about $DDX liquidity) and also volume to pick up as the DerivaDEX platform launches in mainnet soon (latest update).

Currently, the Bancor pool has no space available and LPs can’t provide single-sided liquidity on the TKN side ($DDX). I am proposing a 300K trading liquidity limit for the $DDX pool.