Proposal: BanklessDAO <> Tokemak

Title: BanklessDAO <> Tokemak

Proposal Champion: Icedcool#4947

Date: October 21st, 2021


BanklessDAO has challenges with the $BANK token of liquidity depth and deployment. Right now we have fractionalized liquidity across Uniswap, Sushiswap, and Balancer.

Insufficient liquidity results in poor pricing and volatility. This negatively impacts exchanges looking to offer the best possible pricing for the token, and the individual, hoping to avoid slippage due to the price impact of their trade. Additionally, in the future BanklessDAO interacting with other projects’ tokens require reliable liquidity.

As BanklessDAO grows we need to continue to address the issue of liquidity.

Through Tokemak we can solve that problem and deploy liquidity quickly and effectively using the platform.

Currently the platform supports:

  • Sushi
  • Uniswap (v2 at start)
  • Balancer
  • 0x

In the future they will support more AMM’s and plan to deploy to multiple L2’s.

The integration of BanklessDAO and Tokemak, would enable the quick and efficient deployment of liquidity, create a token swap opportunity for the DAO to be exposed to the valuation of TOKE, as well as give BANK holders a novel opportunity to single sided stake their bank on the TOKEMAK platform, enabling further liquidity for the BANK token.

Important Additional Info

Difference between Tokemak and OHM, TLDR:

  • Tokemak allows quick and easy deployment of liquidity to different AMM’s through their platform, and single sided staking of tokens. TOKE holders can direct liquidity, and BanklessDAO will be able to direct liquidity to it’s choice of AMM above.

  • OHM creates a market to buy LP tokens (Eth/BANK liquidity) for BANK at a dynamic price.


The current state of DeFi is comprised of fragmented, unpredictable, and expensively sourced liquidity. Providing 50/50 paired liquidity is expensive for an individual, and has the looming risk of impermanent loss. Traditional market making solutions are opaque for native DeFi builders, highly centralized, and expensive. Finally, reliance upon whales to provide liquidity results in a perpetual state of uncertainty.

Tokemak enables users to both provide liquidity and control where that liquidity goes.

Liquidity Providers deposit single-sided assets into individual Token Reactors and/or Genesis Pools (ETH, USDC), and earn yield in the form of TOKE, Tokemak’s native protocol token.

Liquidity Directors stake TOKE into individual Token Reactors and vote how that liquidity gets paired from the Genesis Pools and to what exchange venue it gets directed. They too earn yield in the form of TOKE.

TOKE can be thought of as generalized or tokenized liquidity. TOKE holders are able to generate liquidity on demand for whatever tokens they want, on whatever exchange they want, by controlling and directing Tokemak’s TVL. This is done through single sided staking on their platform of the token (BANK) then directing liquidity with TOKE via their front end.

Tokemak has several different mechanics and guardrails in place to mitigate IL risk to ensure that Liquidity Providers can always claim their underlying assets deposited, 1:1. These mechanics involve some risk to TOKE stakers, but only as a last resort.

The protocol captures fees from providing liquidity across DeFi. Over time, this will allow Tokemak to build a strong reserve of various assets in Tokemak’s PCA (Protocol Controlled Assets). In the end, the PCA is controlled by TOKE holders through decentralized governance.

It offers opportunities for exchanges to reinforce their liquidity and for market makers to leverage the PCA to create deep liquidity for a specific project.


Tokemak provides invaluable infrastructure for BanklessDAO as it grows and migrates from L1 to L2’s. The support that the platform would provide for liquidity to the BANK token, would enable the tokens use both internally to the DAO, and externally as other platforms begin to integrate with BanklessDAO.

With the Tokemak platform managing the liquidity for BanklessDAO, the DAO can focus on onboarding 1 billion people into crypto without having to worry about the liquidity of the token.


  • $3,000,000 in notional value, swapped in BANK for TOKE(details below)
  • Kick off a token swap with a 30-day MA for BANK and TOKE
    • EXAMPLE:
      • BANK 30-DAY Moving Average = 0.090165
      • TOKE 30-Day Moving Average = 60
      • Swap 33,272,334 BANK <> 50,000 TOKE


To kickstart a Tokemak Reactor, BanklessDAO will need to do a token swap of $3,000,000 in notional value of BANK for TOKE. This will be a backing for the platform to minimize slippage and risk to single sided BANK stakers.


  • Deep Liquidity in the chosen AMM of BanklessDAO
  • Ability to quickly deploy to different AMM’s, and later L2’s.
  • No or low slippage for trades (buy or sells)
  • Staking opportunity for BanklessDAO members(BANK holders)
    • Treasuries (DAO, and GUILDS) and BANK holders could stake BANK for TOKE rewards
  • Increased treasury value from token swap (TOKE)
    • BanklessDAO would gain exposure to the TOKE token value, and if the platform does well and accrues value, the valuation of TOKE would increase.


Sentiment Poll

  • For - Execute swap with Tokemak for BANK reactor ignition - dependent upon C.O.R.E voting results.
  • Against - Do nothing

0 voters


Alchemist here & I love the proposal, is there some kind of study the tokenomics committee can do to see from the date of inception how the tokemok protocol helps stabilize $Bank id love to see & help out on any research regarding this or any help needed from treasury members on the rollout :slight_smile:


Sounds like something to ask the members of the Analytics Guild for help on. Would give good data for metrics or KPIs.


I really like the proposal. While David H. has raised a valid concern about unintended negative consequences of incentivizing liquidity, I think this proposal avoids the potential pitfalls.

  1. Any holder of BANK can provide one-sided liquidity, not limited to whales, and receive TOKE rewards (i.e. large BANK holders/stakers aren’t directly rewarded with more BANK)
  2. Tokemak and Bankless are innovation leaders in their respective sectors of the emerging decentralized financial system, and both Tokemak and Bankless DAOs would benefit from the asset diversification in their treasuries
  3. greatly improved liquidity for BANK buyers and sellers, including those receiving ongoing compensation for contributions in BANK

Looks good to me! Would love to understand where the depth comes from - I think it’s Tokemak-owned liquidity, but I could be wrong.

1 Like

That’s my understanding, they also assume the impermanent loss risk

Great job @Icedcool - i know @livethelifetv put out another proposal to help add liquidity for BanklessDAO - would love to see a side-by-side comparison of Tokemak & Olympus in helping the DAO better control it’s liquidity :pray:


Let me know if you have other questions, or need more clarity on that.


The whole idea is to use them side-by-side !


our DAO is gmi! Olympus Pro and Tokemak are great products for DAOs. We also need to get TOKE tokens into our treasury so we can better route liquidity


Thank you for that @Icedcool , Bankless DAO gmi :pray:


Question: would people be able to retain access to Discord via Collab Land when they stake into the reactor? I think this is possible if the reactor is a unique contract (and no other non-BANK tokens are going into it).

Also as a side note on the synergy flow with Olympus Pro and TokeMak and why I think this could be interesting:

Step 1: Member provides liquidity on AMM X
Step 2: Member bonds LP tokens via Olympus Pro and receives discounted BANK
Step 3: Member takes discounted BANK and single sides into TokeMak reactor
Step 4: TokeMak reactor directs BANK to AMM X
Step 5: Member earns TOKE rewards for staking

This provides a unique synergy where it creates extremely deep liquidity that’s owned by a combination of both the community treasury and individuals. The community treasury is earning trading fees and LM rewards with exposure of impermanent loss while the individuals are earning LM rewards with no risk of IL. There’s a unique dynamic here with the IL that I’m happy to explain on a call to save time.

The token swap also really aligns both communities (treasury + individuals have TOKE) and is one of the few instances where I think a token swap is valuable.

Overall, pretty happy with this strategy :slight_smile:


Holy shit this is brilliant.

1 Like

Question: would people be able to retain access to Discord via Collab Land when they stake into the reactor? I think this is possible if the reactor is a unique contract (and no other non-BANK tokens are going into it).

I’m almost 100% certain yes. The token would be tBANK, and would be a 1-1 of BANK staked to tBANK received.

Once the snapshot goes, and we get the go ahead on the reactor, I’m planning to work with the Tokemak team and to get this squared away.

I think the only considerations would be snapshot voting, which we would need to sort out.

Step 1: Member provides liquidity on AMM X
Step 2: Member bonds LP tokens via Olympus Pro and receives discounted BANK
Step 3: Member takes discounted BANK and single sides into TokeMak reactor
Step 4: TokeMak reactor directs BANK to AMM X
Step 5: Member earns TOKE rewards for staking

When the tokenomics, are just right.


if there’s tokenized derivative of the position we should be all good :+1:


I assume it goes without asking that Tokemak’s contracts have been well audited? We’re talking considerable investment…


Report from Quantstamp

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FYI Voting closing on 11/1/21.

Admittedly, I need to do more research, but in general, I love the idea of increased liquidity to supplement contribution. I already want to hold $BANK- and earning TOKE rewards for doing so is a cherry on top.

If there’s a conversation circa this issue at any point in the near future, I’d love to jump in.

1 Like

I’m very happy to see proposals aiming at increasing BANK liquidity and like to see them coming. Do I understand this correctly though? -

This proposal requires us to swap around 30M BANK tokens (3% of total supply) for TOKE, hence giving us a significant exposure to TOKE’s price. If this is the case - I view it as too risky and the price too high. The fully diluted valuation of TOKE is $6.6bn. What are their revenues? What’s the current value of collateral backing this? Potential bubble territory based on current ‘DeFi 2.0’ popularity.

Anyways, I know saying anything is under/ovevalued today is political so if you disagree it’s fine but let’s be aware of the risk here. If I understand it correctly, we are betting 6x the amount of total seasonal funding for all projects on a single project, be it an important one. Hmmmm.

1 Like