Summary

This proposal aims to strengthen the adoption of lisUSD by supplying 1 million lisUSD to the Lista Market on Avalon Labs. This initiative is designed to boost liquidity, enhance user engagement, and promote wider acceptance of lisUSD as a stable currency within the DeFi landscape. Additionally, the proposal suggests that the supply cap of lisUSD and lisUSD allocation to the PSM (Peg Stability Module) will no longer require proposals for future adjustments. This change will streamline operations, making it easier to stable lisUSD pegging, and involve more partners like Avalon Labs in the near future.

Abstract

This proposal aims to:

1. Supply 1 million lisUSD to the Lista Market on Avalon Labs (DeFi), allowing Avalon users to borrow the supplied lisUSD.
2. Eliminate the requirement for formal proposals when making changes to the lisUSD supply cap and PSM lisUSD allocation, enabling stable pegging and efficient onboarding of additional ecosystem partners like Avalon Labs in the future.

Motivation

The motivation behind this proposal is to support the growth of lisUSD and its ecosystem. By supplying 1 million lisUSD, we aim to increase liquidity in the Avalon Lista Market, benefiting both users and developers. Moreover, removing the requirement for proposal-based approvals regarding the supply cap of lisUSD and PSM lisUSD allocation will allow for a more agile response to market conditions and ecosystem needs, ensuring we can swiftly adapt as we transition towards a fully decentralized DAO.

Specification

Supply Amount

1,000,000 lisUSD

Target Market

Lista Market on Avalon Labs (DeFi)

Supply Cap Adjustment

Future changes to the supply cap of lisUSD will no longer require formal proposals.

PSM Cap Adjustment

Future changes to the PSM lisUSD allocation cap will no longer require formal proposals.

Benefits (Pros)

Increased Liquidity

Supplying 1 million lisUSD will significantly improve the liquidity of lisUSD.

Simplified Governance

By removing the need for formal proposals to adjust the supply cap and PSM lisUSD cap, we can enable rapid decision-making, allowing the project to better accommodate shifting market conditions.

Enhanced Adoption

This initiative is expected to drive broader adoption of lisUSD within the DeFi space, fostering growth in the ecosystem.

Downsides (Cons)

Risks of Increased Supply

Increasing the available supply without stringent governance may lead to inflationary pressures on lisUSD if not managed properly. The team will mitigate this risk by efficiently expanding lisUSD utilization and leveraging economies of scale.

Potential Governance Concerns

Eliminating the requirement for formal proposals could attract scrutiny over governance practices, potentially impacting stakeholder confidence. However, it is crucial for the team to maintain proper operations during the transition to fully decentralized governance.

Market Reactions

The market may react unpredictably to this increase in liquidity, necessitating careful monitoring of lisUSD's performance post-implementation.

Voting

Yes: Approves the supply of 1 million lisUSD to Avalon Labs’ Lista Market and removes the requirement for proposal-based approval for changes to the lisUSD supply cap and PSM lisUSD allocation cap. No: Rejects the supply of 1 million lisUSD to Avalon Labs’ Lista Market and the removal of proposal-based approval for changes to the lisUSD supply cap and PSM lisUSD allocation cap.