Proposal: BanklessDAO <> Tokemak

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
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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.

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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:

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

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

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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

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

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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:

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Holy shit this is brilliant.

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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 Collab.land 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.
image

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

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

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Report from Quantstamp https://certificate.quantstamp.com/full/tokemak

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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.

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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.

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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.

That is correct.

A component of this as well is that the TOKE token will be used to control the deployment of liquidity, so while the price may fluctuate, it will also be used to manage liquidity on AMM’s.

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.

Definitely agree it is a risk, although potential upside as well.

Aside from that, what I like about it is through the token swap we align ourselves to support our mutual success.
Stronger together.

Thanks for clarifying. I do like the ‘stronger together’ approach of closely aligning ourselves with and taking a stake in selected projects.

As above, my main concern is that the whereas BANK’s market cap is 100M, the fully diluted market cap of TOKE is 6.9B - which doesn’t seem massive in comparison to some hot projects in the space rn but is massive by any objective standards, especially if we are taking a long-term view (which in this case we are). It probably wouldn’t be my first choice to invest in from a growth point of view, especially at this level of exposure, tough I understand this is mainly a strategic play for a different reason.

I haven’t looked into where TOKE is deriving its valuation from in much detail though, so happy to leave that up for discussion, if you or others have. If you tell me their P/E ratio is about 30 like Sushi, I will immediately become more bullish. If it’s 3.000, I will become very very cautious.

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