Enhance BAG Token Liquidity on Ethereum Mainnet

Background

Bag.win has been focused on enhancing the utility and liquidity of the BAG token within our ecosystem, aiming to provide a seamless trading experience for token holders. However, recent analyses indicate a need for greater liquidity to accommodate larger transactions on the ETH mainnet with minimal slippage. Currently, executing trades of around 20k USDT results in slippage that exceeds 20%, which limits the scalability of the BAG token for larger investors. To address this, we propose leveraging funds available in the Aave protocol to bolster the BAG liquidity pool on Ethereum.

Proposal

We propose borrowing 150k USDT from Aave to strengthen our liquidity pool on the Ethereum mainnet. The process would include the following steps: Borrow 150k USDT from Aave using ETH & WBTC collateral or other suitable assets in our treasury. Swap the borrowed USDT for ETH on a decentralized exchange. Pair the acquired ETH with BAG tokens currently held in our treasury. Add the ETH-BAG pair to the V2 liquidity pool on Uniswap on the Ethereum mainnet. This added liquidity will increase the depth of the pool, enabling the market to accommodate larger trades (up to 20k USDT) with minimal slippage, specifically targeting less than 3% to provide a smoother trading experience for BAG token holders.

Rationale

Reduced Slippage for Larger Orders: By increasing the ETH-BAG liquidity pool, the platform can handle larger trades with less than 3% slippage, which is crucial for attracting and retaining larger investors. Enhanced Token Stability: With a deeper liquidity pool, the BAG token’s price stability will improve, creating a less volatile environment that enhances confidence for holders and potential investors. Increased Exposure on Ethereum Mainnet: As one of the most prominent networks, the ETH mainnet provides high visibility. Strengthening our liquidity on this network can improve market reach, attracting more participants to our ecosystem. Utilizing Treasury Assets Efficiently: Pairing our existing BAG holdings with ETH makes efficient use of assets in our treasury, adding value without directly selling or diluting BAG token holdings. This proposal seeks to optimize our liquidity setup, strengthen the BAG token’s position in the market, and foster a more scalable trading environment.