YIP-13: Protocol Owned Liquidity

Summary

• yAxis proposes to allocate 250K YAXIS tokens to launch a Protocol Owned Liquidity (POL) bond programme in partnership with Olympus Pro.
• The goal is concurrently run the Olympus Pro POL programme whilst continuing to incentivise the Uniswap LP.
• If successful, yAxis will sunset LP emissions in the future to focus on Protocol Owned Liquidity. yAxis would no longer be required to pay out 250K tokens per quarter, saving ~1M YAXIS tokens over a calendar year.
• An additional benefit of POL: yAxis would create a new revenue stream in the form of Uniswap fees.

The DeFi landscape has changed dramatically in recent months, shifting focus from emissions-fueled growth to a post-emissions world. This pillar of DeFi 2.0 highlights the importance of sustainable revenue, and puts emphasis on DeFi projects owning their market liquidity.

YIP-13 proposes to allocate 250K YAXIS tokens to work with Olympus Pro to purchase liquidity from LP providers.

Users deposit liquidity (Liquidity tokens) into Olympus Pro, and are paid a premium for this liquidity in the form of “Bonds” or more accurately, discounted tokens. As a project purchases liquidity, and the owned liquidity grows, the need for emissions decreases to a point where LP emissions may no longer be required.

As mentioned, these bonds are offered at a discount to the market price, essentially giving Liquidity Providers an incentive to sell their LP tokens to the project. Projects ultimately get to keep the liquidity, and the LP’er makes more of a profit. Win-win.

In addition, protocols also get to decide how they want their bonds to vest. Typically, this is set linearly with higher price discounts coming from longer vesting periods. Again, this helps deter mercenary capital from turning a quick profit. At the completion of the vesting period, the bond holder can claim all of the accrued tokens.

NOTE: yAxis currently incentivizes the YAXIS-ETH UNISWAP V2 LP Pair with 250K YAXIS tokens every three months.

If approved, YIP-13: Protocol Owned Liquidity would:

• Allocate 250K YAXIS tokens to launch Olympus Pro POL programme.
• Provide liquidity for a 3-month test of the POL programme.

Voting is now open and will close in 48 hours.

Start: 12 Nov 2021, 2100 UTC End: 14 Nov 2021, 2100 UTC