TLDR

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

Abstract

There is currently 116.8K BNT and 625.8K MANA tokens in the BNT-MANA pool. This has resulted in a pool that has roughly 1.6M in liquidity. At the moment, LPs on the TKN side (MANA) can’t provide single sided liquidity since there is no capacity. This proposal is seeking to increase single-sided capacity in the MANA pool by increasing the Co-investment limit to 500K BNT.

Motivation

If we want to attract more MANA 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 MANA-BNT pool data shows that it has roughly filled up completely on the week of 3/8/2021:

This suggest to me that there is demand for LPs on the MANA side to provide liquidity and we should open up space from our side.

The top pool for MANA is on Uniswap (not much on other DEXes) and it is paired with ETH. We should strive to make the Bancor pool deeper to support larger trades (equates to lower slippage).

Currently, this pool is filled completely on Bancor and LPs can’t provide single sided liquidity on the TKN side (MANA). I am proposing a 500K Co-investment limit for the MANA pool which should open up roughly 3.5M in single sided liquidity (assuming BNT price at $7.00). If this pools fills up completely, we would have a pool that’s roughly ~7M in depth. Our pool will also be competing with CEXes that also have large amounts of MANA

If we attract MANA LPs and grow the pool to its full capacity, we will roughly have ~2.69M in MANA tokens (assuming price of $1.30 for MANA) which would put us in the ~9th place among CEXes.

For

1. A larger co-investment limit on the pool will let LPs provided single sided liquidity and will lead to an increase in pool depth
2. More liquidity in the MANA-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
2. We do not need extra liquidity in our platform to support larger trades
3. We do not need to generate fees for our platform or BNT holders