[DCP-28] 🚰 Allocation of RADAR Tokens to GSR for Liquidity Support

The proposal has been amended to take into consideration the community sentiment that 50 rather than 80 million RADAR are needed from the treasury to ensure GSR has the correct number of RADAR to execute their services.

Summary

In the current volatile market environment, ensuring sufficient liquidity for RADAR on centralized exchanges is critical to maintaining price stability and enabling efficient trading. This proposal seeks approval for the allocation of 50 million RADAR tokens from the DAO’s treasury to GSR, our strategic market-making partner, to support current liquidity iniaitives across major trading platforms.

Motivation

Liquidity on centralized and decentralized exchanges is essential for the stability and accessibility of RADAR. Without adequate liquidity, the risk of significant price fluctuations increases, especially during large trades, which could negatively impact both retail and institutional investors confidence. GSR has consistently provided crucial liquidity support, helping to mitigate these risks and maintain an orderly market. This proposal aligns with our broader strategy of ensuring RADAR’s growth and stability by bolstering liquidity on key trading platforms.

Abstract

Introduction

The allocation of 50 million RADAR tokens to GSR is proposed to reinforce liquidity on centralized exchanges, a crucial factor for maintaining a stable trading environment for RADAR. With GSR’s proven track record as a reliable market-making partner, this allocation will allow them to continue their effective liquidity provision, reducing the potential for drastic price movements and supporting RADAR’s overall market health.

Token Allocation and Justification

This proposal requests the DAO to allocate 50 million RADAR tokens from its treasury to GSR. The purpose of this allocation is to enable GSR to continue its market-making activities, ensuring that RADAR remains liquid and attractive to traders across multiple centralized exchanges -- all while maintaining a balanced approach to the DAO's treasury management.

Strategic Importance

Maintaining robust liquidity on centralized exchanges is vital for RADAR’s long-term success. It not only helps to prevent large price swings but also enhances RADAR’s appeal to institutional investors and larger trading entities who require the ability to execute substantial trades without significant slippage. We have already created a strong relationship with them in the past months and this proposal will help to support that as we continue to evolve RADAR's position within the World's Dapp Store. By supporting GSR’s market-making efforts, we ensure that RADAR remains competitive and stable regardless of market conditions.

Future Considerations

As market conditions evolve, the Tokenomics Workstream will continue to assess the effectiveness of this allocation and explore additional strategies to enhance liquidity further. This may include future allocations, adjustments to our market-making partnerships, or exploring alternative liquidity provision methods across both centralized and decentralized exchanges.

Conclusion

The allocation of 50 million RADAR tokens to GSR is a strategic move designed to maintain a healthy, liquid market for RADAR in the face of current market challenges. By voting in favor of this proposal, you support the continuation of essential liquidity support, contributing to the stability and growth of the RADAR ecosystem.