[Temperature Check] Bancor Follow-up Liquidity Deployment (187k IDLE)

Summary

This proposal will deploy 187k IDLE into the IDLE/BNT pool on Bancor, reaching $1m in pool liquidity and reducing current slippage by 50%.

If the proposal passes the Temperature Check, it will be followed by an on-chain vote.

Motivation

In early January, Idle DAO approved a 187k IDLE liquidity deployment into Bancor. That action resulted in 1.68% APR on the IDLE side while benefiting from impermanent loss protection and single side deployment. At the time of writing, the IDLE/BNT pool has ~$500k total liquidity.

Currently, we are already able to increase IDLE/BNT pool liquidity on Bancor by another 257k IDLE, and no proposal needs to be voted on their side if Idle DAO plans to finalize this liquidity deployment. With an additional 187k IDLE deposit, Idle DAO can achieve $1m liquidity, thanks to the BNT matching.

With 55% of the whole IDLE-related liquidity (source), Bancor is the most liquid pool today. In terms of volumes, Bancor manages 26% of the weekly volumes, following SushiSwap (41%) and Uniswap (32%).

SushiSwap and Uniswap still represent the main markets, but they require to deposit both IDLE and ETH. The deployment of $250k IDLE into Bancor would be automatically translated into $500k liquidity. Bancor is still the most straightforward way to reach that milestone without the need to match the ETH side and with minimal capital deployment.

Furthermore, the aggregation of the liquidity in a single pair enables better market performances, generating benefits for community members that interact with DEX aggregators like Paraswap, 1Inch, Matcha.

Table 1.1 - Current Slippage on DEXes

SIZE	Bancor	SushiSwap	Uniswap	Paraswap	1Inch
$ 10k	4.1%	10.6%	10.5%	2.7%	4.3%
$ 50k	17.7%	36.6%	36.9%	12.0%	12.3%
$ 100k	30.2%	53.5%	53.8%	19.5%	21.2%

Table 1.2 - Hypothetical Slippage with $1m total liquidity on Bancor

SIZE	SLIPPAGE
$ 10k	1.8%
$ 50k	8.4%
$ 100k	15.5%

This proposal is connected with "Treasury Management M1-2022" post, released by @biaf, which analyzed the past liquidity deployments and their outcomes.

More info about this proposal available here.

Specification

Actions:

• Route 187k IDLE from Ecosystem Fund to the Treasury League multisig. Treasury League will deploy funds into the Bancor IDLE/BNT pool.

Voting Options

Please cast your vote on one of the following options: FOR: Approve Bancor liquidity deployment AGAINST: Vote against Bancor liquidity deployment DISCUSS MORE: Discuss more the proposal

This poll is available for both $IDLE token holders and stkIDLE holders. The final $IDLE voting weights will be calculated using the approved calculator.