Closing the PSY token sale and adding liquidity to a Uniswap V3 pool using Arrakis Pro

Proposal Summary

An equitable approach is proposed to add liquidity for PSY utilizing Arrakis Pro and their Hybrid Order Type (HOT) Automated Market Maker (AMM) design.

The plan starts with a pool composition of 90% PSY and 10% ETH, using funds from both the public token sale and RX-π.

Upon approval of this proposal, the PSY public token sale will be closed and remaining PSY and ETH will be withdrawn from the TokenSale smart contract.

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Background

The DAO desires liquidity for its PSY/ETH pair. By leveraging Arrakis Pro's sophisticated liquidity management capabilities, the liquidity pool can be dynamically adjusted to improve returns.

The starting pool will consist of approximately 42 ETH paired with PSY at a starting price of $0.1 per PSY.

Over time, the pool will rebalance to achieve a 50% PSY / 50% ETH composition through Arrakis Pro's active liquidity management.

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Proposal Details

• Allocation Strategy: Given there are 16.7 additional ETH from the public token sale, only 25.3 ETH need to be extracted from the existing RX-π funds to reach the target of 42 ETH. Around 8.694% will be taken from each fund to gather this amount.

• Public Token Sale Closure: Upon approval of this proposal, the public token sale of PSY will be closed, and remaining PSY and ETH will be withdrawn from the public token sale contract. Of the withdrawn assets, the ETH plus ~11.5M PSY will be used to create the liquidity pool on Uniswap V3 via Arrakis Pro.

• Arrakis Pro: Arrakis Pro's HOT AMM design is expected to optimize returns for psyDAO as liquidity provider by reducing Loss Versus Rebalancing (LVR) and capturing more of the transaction volume.

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Impact on Funds

Here's how much each fund will contribute and what remains after the new allocation:

• Reserve Fund:

  • Initial Amount: 14.55 ETH
  • Contribution: 1.265 ETH (8.694%)
  • Remaining: 13.285 ETH

• Psychedelic Art Fund:

  • Initial Amount: 14.55 ETH
  • Contribution: 1.265 ETH (8.694%)
  • Remaining: 13.285 ETH

• Community Engagement Fund:

  • Initial Amount: 29.1 ETH
  • Contribution: 2.53 ETH (8.694%)
  • Remaining: 26.57 ETH

• Operations Fund:

  • Initial Amount: 43.65 ETH
  • Contribution: 3.795 ETH (8.694%)
  • Remaining: 39.855 ETH

• Development Fund:

  • Initial Amount: 72.75 ETH
  • Contribution: 6.325 ETH (8.694%)
  • Remaining: 66.425 ETH

• Psychedelic Science Fund:

  • Initial Amount: 116.4 ETH
  • Contribution: 10.12 ETH (8.694%)
  • Remaining: 106.28 ETH

Total Contribution: 25.3 ETH from funds + 16.7 ETH from the public token sale = 42 ETH

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Call to Vote

We urge all PSY holders to review this proposal, taking into account the strategic advantages of utilizing Arrakis Pro’s technology and the efficient use of the public token sale funds for liquidity management.

For more information on Arrakis Pro, please refer to their documentation: Arrakis Pro Documentation

This vote is open to all holders of PSY or PSYC.