Proposal

To ask the Devs to consider lowering the liquidity percentage from 15% to around 7.5% between now and launch date.

Objectives

• To buy and burn X7DAO tokens while their value seems relatively low
• Provide a real world test for the switch backwards and forwards between adding liquidity and burning tokens.
• Make X7DAO deflationary between now and launch date. X7R is already deflationary.

Background

While no promises were made, it was initially expected that X7 would launch in late January. This was delayed to enable X7 to go live on 5 chains instead of just 1 - which is fine. We are currently in a holding pattern and do not know when the launch date will be.

Presumably there was enough X7DAO liquidity in late January to enable the Eth version to go live. It is now 3 months later and more liquidity has continued to be added to the Eth liquidity pair - so presumably we now have more then enough liquidity to go live on ETH.

This proposal would not remove liquidity but simply pause the addition of new liquidity till launch date.

How Liquidity is added to the X7DAO liquidity pool

As the diagram above shows the EcoSplitter funnels 10% of incoming funds towards X7DAO. There is a setting that determines if those funds go towards adding liquidity to the liquidity pool or buying X7DAO tokens and burning them. That setting is a percentage of the total number of tokens. My understanding is it is currently set to 15% and we are already more then half way towards that long term goal of 15% as the Liquidity bot on Telegram shows us:

Compare this to the daily trading volume of $4,109 shown on Coin Gecko and X7DAO liquidity seems way more then adequate

In fact with daily trading volume of $4109, it would take 57 days to cycle through the full liquidity pool of $237,904 once. Now of course, we assume volume will increase once X7 launches, but we seem to have a pretty big safety margin and when volume increase after launch, so would the addition of liquidity when the setting would revert back to its current level of 15%.

What level should the setting be changed to?

• The setting could be lowered to 3% or 5% to make sure the pause is not interrupted till launch. Note this would not remove liquidity, but simply pause the addition of new liquidity till launch.
• Alternatively, if the Devs saw value in having a real world test of the system switching back and forwards between "liquidity addition" mode and "token burn" mode, they could lower the setting to just under the current liquidity level, say 7.5%, then as the value of X7DAO and ETH changed between now and launch, that switch may be turned on and off several times providing a real world road test.

Even with the pause, progress towards the long term 15% liquidity target would continue.

Because the funds would be used to buy and burn X7DAO tokens, the total supply of X7DAO tokens would be reducing - causing the liquidity percentage to inch higher compared to if no burn had taken place.

Net Effect

• X7 would still reach its long term liquidity target (I would argue sooner then it otherwise would have)
• X7DAO tokens are being bought at what is likely a lower price now during the pause then if there was no pause and the tokens were not bought and burned till say 6 months from now
• X7DAO tokens supply reduced and should have a comparatively higher value

Conclusion

This proposal is not instructing the Devs to do anything. It is asking them to consider the above and if they agree it would be beneficial to change the setting to the level they deem most appropriate.