REX Protocol Liquidity Network (REX-LP)

This proposal amends a previous proposal that would have produced a protocol owned liquidity network on Polygon using SuperTokens. This proposal removed the use of SuperTokens and constructs the network using a REX token instead of a RIC token (see “RIC to REX Transition” proposal for details on REX). It also increases the amount to be allocated to buying back RIC from 1250 USDC to 2000 USDC.

REX Protocol Version 4

This proposal lays the foundation for the 4th version of the REX Protocol. Full details on REX Protocol Version 4 can be found in this white paper: https://docs.google.com/document/d/1Zn0yVWYm2sHPcsA75dZPdIhTu3o8pYSQbUc8aT34XMM/edit?usp=sharing

Liquidity Network Implementation

REX-LP is made of several Uniswap V3 liquidity pools that together form a network with REX token at its center. This is a similar design to what Thorchain does with RUNE token. Below is the specifications for the constructing the network.

Liquidity Pairs

• USDC — REX
• WBTC — REX
• ETH — REX
• MATIC — REX

Funding the Network

The network can be funded with the equivalent of 10000 USDC from the treasury. 2000 USDC will be used to purchase RIC and that RIC will be burn it for the new REX protocol Token (REX). The token allocations are:

Token	Amount (USDC equivalent)
REX	2000
USDC	2000
ETH	2000
WBTC	2000
MATIC	2000

Getting REX Tokens A separate proposal will transition from the Ricochet (RIC) SuperToken to the Ricochet Protocol Token (REX) standard ERC20 Token. In order to get enough REX tokens for the network, 2000 USDC will be used to buy back RIC and burn it for REX tokens using the REX Protocol Token (REX) contract. The buy back will happen over 1 week using the USDC>>RIC V3 REX Market. Additionally, the RIC remaining in the treasury will be burned for REX. This will provided enough REX tokens to seed this liquidity network on Uniswap.

Future Work This liquidity network is being built with the intention of permanently locking liquidity for REX Protocol V4. This would be similar to the popularized “protocol owned liquidity” model. A contract is being developed to lock the Uniswap V3 NFTs and automatically compound the fees accumulated back into the network. This means that the protocol’s locked liquidity will grow overtime as the protocol’s liquidity gets used.

For more details on this, visit this project on Github which implements locking liquidity and automatically compounding fees using Revert.finance’s SelfCompounder contract: https://github.com/Ricochet-Exchange/rex-liquidity-network. This project is still in development and testing but the majority of the code is available now for review.