[BIP:88] CEX Liquidity Incentives Budget

TL;DR - Approve a $100,000 budget to fund Beefy’s ongoing incentive campaigns and initiatives to support and maintain centralized exchange listings and facilitate offchain trading.

Background

In May 2024, the DAO approved an initial budget to fund a centralized exchange liquidity mining campaign with Hummingbot that incentivized the Binance BIFI/USDT pair. The aim of this campaign was to bolster liquidity and volume for BIFI on Binance to preserve our listing, and to provide sufficient liquidity to facilitate offchain demand for the token.

Fast forward 10 months, and we are pleased to confirm that our campaign had been a significant success. Volumes have been consistent and sufficient throughout the year, and our listing remains in good standing. Key statistics from the year include:

• Average liquidity of $10.8k per day;
• Average filled order volume of $89.4k per day; and
• Over 100 unique miners participating in our campaign.

Feedback from the Hummingbot team confirms that the long duration and consistent reward levels of our campaign appear to have been attractive, and caused a sustained increase in our performance. We have discussed and agreed that an extension of this campaign would make sense, and result in maximum liquidity retention.

At the same time, the core team has met with and investigated additional services such as Cede, which support centralized exchange listings with active trading campaigns. These differ from liquidity mining programs like Hummingbot, in seeking to attract competitive traders to to actively revitalize trading volumes and open interest, as opposed to liquidity providers that fill order books. An effective strategy for managing liquidity on centralized exchanges involves many tools and techniques, and Beefy’s core team are keen to expand the range of tools at our disposal over the coming months.

Renewed Budget

Based on our progress over the last 10 months, the core team is requesting a further budget of $100,000 for use over the next year or so until a further 12-month extension to our Hummingbot campaign comes to a close.

The first ~$50,000 of the budget is allocated for a standard renewal with Hummingbot, which will commence when the current campaign comes to an end in May. This would continue for 12 months, and be pre-notified to existing miners, ensuring minimal leakage with the handover of programs. The goal of this funding is purely to preserve the existing performance, ensuring smooth continuation of our critical Binance listing.

The second half of the budget is discretionary for use as the core team sees fit to support liquidity on centralized exchanges. This includes but is not limited to Binance, and may be used for extending the scope of Hummingbot’s work, for use with alternative liquidity mining providers, or for use with other services like trading competitions (as offered by Cede). This budget will only be used where it is reasonably necessary and serves a strategic purpose for the DAO’s liquidity. All unused funds will remain within the DAO treasury, and the approval under this proposal will expire with the end of the next 12-month Hummingbot campaign.

It is intended that a further budget should then be established towards the end of the next 12-month Hummingbot campaign.

Proposal

Beefy DAO should approve a $100,000 budget to be used at the core contributor team’s discretion to support and maintain listings on centralized exchanges.