A Novel Protocol Owned Liquidity Strategy

This proposal aims to convert 250,000 LODE from the treasury into protocol owned liquidity Background: This proposal aims to gauge to the potential of pair LODE tokens with Lasset’s. We aim to boostrap a LODE-LWETH pool along with a LODE-LUSDC pool. We foresee several benefits to these pools Deeper liquidity of LODE as there will be more liquidity on the pair. Passive buying pressure against the LODE token as the assets LUSDC and LWETH accrue lending return Long term deposits in lodestar as POL Improved liquidation routes Arbitrage potential for users as the prices + lending return shifts the value of LWETH and LUSDC

Some risks of this proposal: Shallow liquidity for LODE currently. Low return on capital in the short term compared to incentives

How these risks are addressed: Shallow liquidity – One community member Naller has agreed to provide 4750 USDC to jumpstart this pool and so impact of LODE sales will not hit the market. Additionally, he has agreed to stake the tokens directly in order to ensure the tokens are not sold Low return on capital in the short term – There is no way to mitigate this risk. However, there is the belief that the longer term lending return as we model this system on a 5-10 year time frame it will be worth it Structure and Mechanics

Tokens will be swapped with Naller at a 950k FDV which converts 100,000 LODE into 4750 USDC The 100k LODE will be staked and address provided to the team for verification 4750 USDC with be converted into LUSDC and deposited into a full range LODE-LUSDC pool along with another 100k LODE Over the next 50 days 25k LODE will be sold on the open market to WETH, deposited into Lodestar and the receipts will be moved into a full range LODE-LWETH pool along with another 25k LODE

Voting Instructions: Option 1: Yes, Implement the entire proposal including the token swap with Naller Option 2: Yes, Implement the proposal but sell the tokens on the open market Option 3: No, do not implement this proposal