ICE-USDC Liquidity Management as Delegation v2 Goes Live

Background

Delegation v2 is expected to go live next week, which is estimated to reduce daily ICE emission by 45%+, effective immediately.

Looking at the last week of data since ICE Poker Flex Tournament mode launched, the average daily metrics are as follows:

• 2.4M ICE is emitted per day from ICE Poker Metaverse Challenge Mode and Badge Redemptions for ICE
• 614k ICE is burned per day from All Access Wearable upgrades
• 100k ICE is burned per day from All Access Wearable activations
• 111k ICE is purchased and burned per day from protocol revenue
• 178k ICE is burned per day from Shine purchases
• 25k ICE is burned per day from Tournament wearable purchases

Calculated from the metrics above, our daily burn-to-earn ratio is currently .428. Following the successful deployment of Delegation v2 and an estimated 45% reduction in daily ICE emissions, the ICE burn-to-earn ratio is expected to improve from .428 to ~.779.

This is without factoring in the growth of ICE Poker Tournament Mode. A 144% increase in Shine and tournament wearable purchases brings us to a 1:1 burn-to-earn ratio. Given that Tournament Mode just launched, we are confident that this level of growth can be achieved very soon.

The DG Treasury currently provides ~$1.57M in ICE-USDC LP, which represents ~785K USDC and ~119M ICE. Individual community members also provide liquidity to the pool (~82M ICE) and are incentivized to do so via the passed MANA incentives proposal (#QmYjihU). These rewards end October 15th.

The DG Treasury holds 23,171,140 ICE, 260,575 USDC, and an incremental 232,512 DAI from removed liquidity via passed governance proposal (#QmcvMEu).

The DG DAO has been buying and burning ICE each week using revenue from Metaverse advertising (#QmRFTXe), Polygon validator node rewards (see: #QmY62NL), and secondary sales royalties (#QmPjLhx).

Proposal

1. Add back 23,171,140 ICE and the corresponding amount of USDC to the pool.

2. Allocate the future ICE bought back with revenue from Metaverse advertising, Polygon validator node rewards, and Secondary sale royalties to be paired with USDC and added to the ICE-USDC LP.

3. After Delegation v2 is live (#Qmd3TuV), give the DG Team discretion to use the remaining USDC and DAI counted in the ‘Background’ section of this proposal to both purchase ICE and pair with ICE to add to the ICE-USDC LP.

Rationale

1. This immediately adds back the remaining ICE component amount of the LP that was previously removed. This will strengthen the ICE-USDC LP before individual stakers may exit the LP.

2. Adding incremental liquidity to the ICE-USDC LP is more effective in maintaining DG treasury long term value and fortifying ICE liquidity than simply purchasing and burning ICE each week.

3. With Delegation v2 and SNGs live and effectively reducing the daily emission of ICE, this allocation of USDC and DAI would further fortify the ICE-USDC LP by converting USDC to ICE and pairing with USDC to add to the LP.