Context

As of now, the only way to trade $RAW tokens is to attempt to find buyers and sellers via our #otc channel in Discord. This is cumbersome, slow, and prone to scammers, which renders our token illiquid.

In order to make $RAW to be available for real-time trading, we need to allocate resources (a combination of ETH and $RAW tokens) to create a Liquidity Pool in a decentralized exchange.

Doing so will allow our token to be considered liquid and be used as currency, giving our members flexibility to sell whenever they want to, and allowing outsiders to purchase them and join our DAO.

This is very important, as attracting outside talent is paramount to the long-term success of our organization, which has thus far relied heavily in Fingerprints' core team.

A Liquidity Pool also allows us to earn fees on trading activity, as we'll gather some of the spread between buyers and sellers, ultimately providing useful passive income to the DAO.

Proposal

• The proceeds for the Liquidity Pool will be drawn from the predicted 2022 Budget allowance, as previously approved (refer to Budget Proposal for 2022)

• The DAO will initially dedicate the following resources to providing liquidity:

  • 100ETH (from an up to 120ETH pre-approved allocation)
  • 125k $RAW tokens

• The price range for the Liquidity Pool will initially be centered around 0.003ETH/$RAW

  Members @lucaspon and @Glory have already observed public trading data and worked with Hypervisor to calculate the proper initial size and price ranges of this liquidity pool, which is where these numbers come from. These are designed to provide acceptable slippage for up to 5ETH trades within anticipated price ranges.

• Providing liquidity requires us to choose a pricing range for $RAW tokens. Visor will be engaged to initiate a private Uniswap v3 Hypervisor pool. They will actively manage the pool, dynamically changing the ranges in response to market conditions, in exchange for 20% of the revenue generated from the Liquidity Pool's fees

Closing Remarks

Utilizing an active pool management service is important to respond to peaks in price volatility, which are very frequent in cryptocurrency markets, especially those with small amounts of liquidity.

This is crucial to minimizing impairment loss risks and making sure this initiative succeeds in the long run.

Creating a robust pool of liquidity will unlock the potential of the DAO by allowing us to utilize our main asset for a host of important activities.