[GIP-5] Improving Liquidity for GYFI

Voting ended 10 months agoSucceeded

Background/motivation

This proposal aims to improve liquidity for GYFI markets, primarily the upside liquidity. We are looking to allocate resources to the Gyroscope Foundation to create the protocol-owned liquidity pool on behalf of governance, this gives a little more flexibility to tailor it to a good calibration given how the market looks at deployment.

With the performance of currently engaged market maker, we also want to extend the market making budget from [GIP-3] for another quarter, this leaves some further flexibility in case market makers have to be changed or a better arrangement can be found. It also reduces frictions for potential CEX listings, should they develop.

Lastly, we suggest allocating additional SPIN to incentivize liquidity.

Summary of proposal

allocate up to 274 000 GYFI (2% of GYFI supply) to the Gyroscope Foundation to create protocol-owned liquidity pool(s). We suggest GYFI/GYD and GYFI/LST pairs (can be other pairs as well if a great opportunity presents itself).
allow the existing market making budget from GIP-3 to remain allocatable for another quarter.
It is proposed that an additional 300m SPIN is made available for ongoing liquidity incentivization.

Feedback from the discussion in Discord and on the Forum

GYFI liquidity. We are aware of ongoing issues with GYFI liquidity, and are trying to address at least the upside liquidity with this proposal.
Treasury Overview. Info from the team: right now that there isn’t much of a DAO treasury yet. It would have to be grown over time. The protocol hasn’t been generating fees for very long and so far they’ve been set aside as growth incentives or otherwise defaults as backing to GYD (e.g., via GYD rewards) Once there is more of a treasury to manage, we should revisit this topic and set up regular transparent reporting. Also, treasury addresses will be added to the docs very soon, so anyone can have a look.

Risk assessment

A protocol owned liquidity pool would take on the risks of the given pool E-CLPs | Gyroscope Protocol

Off-Chain Vote

For

1.06K GGU96.6%

Against

37.08 GGU3.4%

Abstain

0 GGU0%

Quorum:1099%

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Timeline

Apr 01, 2025Proposal created

Apr 01, 2025Proposal vote started

Apr 03, 2025Proposal vote ended

Apr 03, 2025Proposal updated

Background/motivation

Lastly, we suggest allocating additional SPIN to incentivize liquidity.

Summary of proposal

allocate up to 274 000 GYFI (2% of GYFI supply) to the Gyroscope Foundation to create protocol-owned liquidity pool(s). We suggest GYFI/GYD and GYFI/LST pairs (can be other pairs as well if a great opportunity presents itself).

allow the existing market making budget from GIP-3 to remain allocatable for another quarter.

It is proposed that an additional 300m SPIN is made available for ongoing liquidity incentivization.

Feedback from the discussion in Discord and on the Forum

GYFI liquidity. We are aware of ongoing issues with GYFI liquidity, and are trying to address at least the upside liquidity with this proposal.

Treasury Overview. Info from the team: right now that there isn’t much of a DAO treasury yet. It would have to be grown over time. The protocol hasn’t been generating fees for very long and so far they’ve been set aside as growth incentives or otherwise defaults as backing to GYD (e.g., via GYD rewards) Once there is more of a treasury to manage, we should revisit this topic and set up regular transparent reporting. Also, treasury addresses will be added to the docs very soon, so anyone can have a look.