Proposal for Migrating Liquidity from Polygon PoS to QuickPerps on Polygon zkEVM

Overview

This proposal aims to migrate 50% of Metavault trade's PoL from Polygon PoS MVLP to the QuickPerps protocol on Polygon zkEVM, developed in partnership with Metavault trade.

The current MVLP liquidity pool is experiencing stable utilization, resulting in other opportunities for the remaining PoL. By migrating a part of the liquidity to QuickPerps, we can address this opportunity while supporting our partner's launch and participating in their liquidity mining program.

It is important to note that Metavault’s Trade total PoL is equivalent to 10% of the MVLP pool (671,105 MVLP on a total of 6,130,259 MVLP) and the following proposal suggests moving 340k MVLP (5% of the total MVLP pool) to QuickPerps.

Pros

• Increased Yield for MVX staker: By migrating liquidity to QuickPerps, the remaining liquidity providers (MVLP) will benefit from higher yields due to a higher share of the total rewards.
• Yield generated on Quickperps will be bridged and distributed as a real yield in MATIC for MVX stakers, increasing the actual yield and diversifying the revenue sources
• Support for Partner's Launch: The migration to QuickPerps aligns with the launch of our partner's platform. By participating in their liquidity mining program, Metavault trade can establish a mutually beneficial relationship, fostering collaboration and potential growth opportunities in the future.
• Reducing the esMVX emissions for MVLP and thus MVX inflation as fewer MVLP will be eligible for rewards
• With the PoL migration we will reduce the esMVX emissions by 10% forward to MVLP as fewer MVLP tokens will be eligible for rewards (MVD - Treasury migrated already its MVLP position to QLP)

Cons

Reduced Available Liquidity: Migrating liquidity from Polygon PoS to QuickPerps will result in reduced available liquidity within the current pool. This may impact the ability to place larger trades and potentially limit the Open Interest even if data from the past shows that we never reached such utilization.

Conclusion

Considering the current utilization of liquidity in the existing pool on Polygon PoS, migrating 50% of the PoL liquidity to QuickPerps on Polygon zkEVM appears to be a prudent step. This migration will not only improve the yield for liquidity providers but also support the launch of our partner's platform and enable participation in their liquidity mining program.

While there may be some drawbacks, such as reduced available liquidity (5%), the long-term benefits outweigh these concerns and ensure improved liquidity utilization. It is crucial for Metavault trade to adapt and explore opportunities that enhance efficiency, increase revenue, and foster partnerships in the ecosystem.