Treasury: Deploy $10,000 of $LODE on Timeswap

Introduction:

Following the successful launch in December of an USDC/LODE pair on Timeswap, and following popular demand, we plan on launching a LODE/USDC borrow pair in January, allowing users to borrow LODE against USDC for farming, staking and other DeFi endeavours.

What is Timeswap?

Timeswap is a DeFi protocol that offers oracleless lending and borrowing, enabling users to create money markets for any ERC-20 tokens while offering non-liquidatable loans with fixed terms, oracless and a permissionless structure.

All transactions within Timeswap are fixed-term, offering certainty of interest rates once a position is opened. Additionally, users may exit their position earlier, at the price of a slippage.

The platform's interest rates are determined by the market through a generalized AMM, ensuring unbiased rates without reliance on historical data.

Each market on Timeswap is isolated, protecting participants from risks in other pools, and only overcollateralised loans are possible to maintain security for lenders.

In Timeswap's ecosystem, there are three core market participants: lenders, borrowers, and liquidity providers (LPs):

• Lenders supply capital to pools, enabling borrowers to take out loans, and in exchange, they receive fixed interest, with a portion of this (10%) going to LPs as transaction fees.
• Borrowers access these pools to take loans by locking in collateral and paying a fixed interest upfront; this collateral is returned upon repayment of the principal plus interest. Borrowers also contribute to LPs' fees, with 10% of the interest they pay being allocated as transaction fees.
• Liquidity Providers, on the other hand, provide liquidity to these pools, accepting single-sided exposure, and earn their income from transaction fees paid by both lenders and borrowers. This tripartite relationship sustains the Timeswap ecosystem, ensuring liquidity and facilitating fixed-term, overcollateralized loans without the need for liquidation processes.

Link to Timeswap docs:

https://timeswap.gitbook.io/docs/introduction/introduction

The request

We are looking forward this month at injecting $10,000 of $LODE tokens from our DAO's Treasury (address: 0xed093F9720B2507C9B54FC117ecB2618910734dd) into the Timeswap LODE/USDC Liquidity Pool. This endeavor will not only accrue interest as a liquidity provider but will also strategically position us as the fallback seller in the event of an increase in the LODE's market price.

Proposal

• Initiate a LODE pool on Timeswap and engage in joint marketing endeavors with our new partners. Parameters such as transition price and maturity is under discussion with the Timeswap team and will be shared here to gather feedback from the community
• Allocate $10,000 of $LODE from the Treasury to seed the initial liquidity of the pool
• Should the LODE price raise above the pool's Transition Price, at which point the treasury would become the seller of LODE, the DAO is to be permitted to establish a buy order on Trader Joe’s Liquidity Book to recoup its LODE losses if needed