CIP013 - Repurpose MATIC/CLAM LP

Action Requested

For the Otters' consideration and approval for repurposing MATIC-CLAM LP tokens owned by the Otter Treasury.

Background

The Otter Treasury owns its own trading liquidity is to facilitate Otters in being able to swap our token on decentralized exchanges at the same time generating protocol revenue.

At the time of this writing, the Otter Treasury holds $11,000 worth of MATIC-CLAM LP tokens, which is 99.50% of the total MATIC-CLAM liquidity in existence.

The MATIC-CLAM pair represents 1.35% of the total liquidity depth for CLAM compared to the $650,000 worth for MAI-CLAM LP and worth $166,000 for FRAX-CLAM LP.

Since the inception of the OtterClam protocol, trading on the MATIC-CLAM has generated a total of $863 in reward fees for the Otter Treasury.

Evaluation

The MATIC-CLAM pair is not a popular trading route based on the abovementioned earned reward fees from decentralized exchanges.

Removing the MATIC-CLAM LP would technically reduce the liquidity depth of the CLAM token by 1.35% but it would have no impact on Otters who trade via MAI or FRAX.

Owning the MATIC-CLAM LP also exposed the OtterClam protocol to impermanent loss which exceeds the rewards gained as the protocol provides liquidity two non-stable assets.

The OtterClam protocol also is currently providing liquidity for the QI-MATIC LP and continously farming QI at the time of this writing.

Recommendation

Based from the evaluation above, this proposal is for the Otters to approve the following:

• Remove the MATIC-CLAM liquidity from the Otter Treasury;
• Move the CLAM from the removed MATIC-CLAM liquidity out of circulation supply to the DAO wallet; and
• Pair the MATIC tokens with QI from the Otter Treasury to increase the protocol's QI-MATIC LP position.