Vote 1b: LBP preparations

PROCEED WITH GRO LBP PREPARATIONS

Gro is quickly decentralizing by distributing decision-making power to a wider group of people. This proposal takes another important step on this journey by preparing for wider distribution of the Gro DAO Token using an LBP.

You can read more about Gro’s approach to decentralisation here: https://groprotocol.medium.com/the-chicken-or-the-egg-how-gro-dao-is-launching-governance-e02fdcd452d0

PROPOSAL SUMMARY

If executed, this proposal will:

1. Agree the LBP specifications for the Gro DAO Token launch.
2. Approve the funding of the pool from the Gro DAO Wallet (for GRO) and from a loan from Grwth Lbs Ltd (for USDC).

3. Create the pool used for the LBP.


PROPOSAL BACKGROUND

This is a proposal to make 5% of the Gro DAO Token (GRO) supply available for interested parties within the Gro community. It uses Balancer, a decentralized exchange and leverages a mechanism called Liquidity Bootstrapping. The benefits of a Liquidity Bootstrapping Pool (LBP) would be to:

• Distribute the GRO token among the wider Gro community, beyond early contributors and team members.
• Build deep liquidity for the Gro network, setting it up for long-term success.
• Begin price discovery for the Gro token. Proceeds from the event will be held by the Gro DAO Treasury, a smart contract fully controlled by the Gro token holders.

LBP SPECIFICATIONS

• Pool tokens: GRO and USDC
• GRO start balance: 5M
• USDC start balance: 2.65M
• GRO start weight: 95
• GRO end weight: 50
• USDC start weight: 5
• USDC end weight: 50
• Swap fee: 1.5%
• Duration: 72hrs


FUNDING OF LIQUIDITY BOOTSTRAPPING POOL

The LBP needs to be seeded with initial GRO tokens USDC in order to create the necessary liquidity for participants to access Gro. Gro provided will either remain at the same level in the pool (if no activity) or decrease in number as USDC is traded out for it. USDC will either remain at the same level in the pool (if no activity) or increase in number as there is no additional GRO in circulation that could decrease the amount of the USDC below the starting number. That means it is possible to provide USDC as a loan with relatively little downside risk.

• 5m GRO will be provided by the Gro DAO Treasury wallet.
• 2.65m USDC will be provided as a loan by Grwth Lbs Ltd, to be repaid after the LBP together with interest (paid pro-rata at a rate of 10% APY) when funds are removed from the pool.


What is a Liquidity Bootstrapping Pool?

Balancer’s Liquidity Bootstrapping Pool (LBP) is a Balancer pool that automatically adjusts its token weights over time. This applies downwards price pressure on the token and disincentivizes front-running, speculation and whale buying. See Balancer’s Liquidity Bootstrapping Pool FAQ for more information.

Why a Liquidity Bootstrapping Pool?

The Liquidity Bootstrapping Pool is a battle-tested mechanism for price discovery and liquidity building. It’s been successfully used by numerous teams including Hydra, APY Finance, Maple, Radicle, Klima and Perpetual protocol.

HOW WAS THIS PROPOSAL DISCUSSED?

This proposal was put together by early contributors behind the Gro protocol, in line with the early governance plans for Gro DAO. It has been shared and discussed on the Gro governance forum: https://community.gro.xyz/t/vote-1b-proceed-with-lbp-preparations/18

PAYLOAD DETAILS

Payload 1 creates the LBP: 0x751A0bC0e3f75b38e01Cf25bFCE7fF36DE1C87DE.create("GRO DAO Token Launch", "GROLBPT", ["0x3Ec8798B81485A254928B70CDA1cf0A2BB0B74D7", "0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48"], [950000000000000000, 50000000000000000], 15000000000000000, 0x359F4fe841f246a095a82cb26F5819E10a91fe0d, false)