Proposal: Increase QNT (Quant) Co-Invest to 500,000 BNT - 2nd Attempt

This proposal is expected to appear on Snapshot for voting on [date=2021-07-26 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 500K BNT in the QNT pool.
• It will open up space for LPs on the TKN side (QNT) and potentially 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 provided 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 is currently 53.7K BNT and 2.1K QNT tokens in the BNT-QNT pool. This has resulted in a pool that has roughly 315K in liquidity. At the moment, LPs on the TKN side (QNT) can’t provide single sided liquidity since there is no capacity. This proposal is seeking to increase single-sided capacity in the QNT pool by increasing the Co-investment limit to 500K 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 QNT pool went live with the release of 2.1 and has recently become popular due to the coinbase listing.

The data for the QNT-BNT pool shows that its protected value has been at around 400K since early March:

This suggest to me that there is demand for LPs on the QNT side to provide liquidity and we should open up space (it has been filled for a while).

The top pools for QNT are on Uniswap v2 and v3 and are paired with ETH. Cumulative liquidity is roughly ~3M on other DEXes and we should be able to make the Bancor pool deeper to support larger trades with low price impact.

Currently, this pool is filled completely on Bancor and LPs can’t provide single sided liquidity on the TKN side (QNT). I am proposing a 500K Co-investment limit for the QNT pool which should open up roughly 1.5M in single sided liquidity (assuming BNT price at $3.00). If this pools fills up completely, we would have a pool that’s roughly ~3M in depth.