Title: Amplifi Liquidity Requests The Creation of Concentrated Liquidity Pools and Automated Liquidity Vaults
Author(s) Don Thibeau and Jason Leupold
SaucerSwap Voting Interface: None
Related Discussions: None
Submission Date: August 6, 2024
Summary
This proposal aims to justify why concentrated liquidity pools and automated liquidity vaults on SaucerSwap will help partner tokens launching on Hedera. Approval of this proposal will enhance on-chain liquidity and trading volume for projects launching tokens on Hedera and therefore increase volumes on SaucerSwap itself. Below are the goals of this proposal.
Boost the visibility and accessibility of partner tokens.
Reduce slippage through increased market depth and liquidity
Increase trading efficiency and reduce slippage.
Increase the trading volumes on the Hedera network
Background:
Amplifi Liquidity is deploying a pool of HBAR to support and grow the liquidity and trading volume of new projects on Hedera. Without this proposal deploying liquidity and growing the overall Hedera ecosystem and associated projects will be more challenging and extend the time it takes for TVL and trading volume to increase on Hedera and thus SaucerSwap.
About Amplifi Liquidity:
Amplifi Liquidity is a DeFi market maker who aims to make executing an on-chain strategy as easy as on a centralized exchange. We collaborate with clients to understand their on-chain needs and map out clear goals like increasing TVL or trading volume. We accomplish those goals by leveraging the power of concentrated liquidity in conjunction with custom liquidity strategies, while offering solutions to fortify partner tokens and establish robust on-chain liquidity wherever those tokens exist.
Proposal Details:
This proposal centers around requests that are aimed at increasing market depth and liquidity. At the center of the proposal are the need for two features when it comes to the liquidity pools. The first is Concentrated Liquidity Pools whose purpose is to optimize capital efficiency by allowing liquidity providers to concentrate their assets within specific price ranges. The second is Automated Liquidity Vaults to simplify liquidity provision by automating strategies and management.
The process for implementing and managing these liquidity enhancements and incentives will be largely directed by Amplifi Liquidity. Projects launching on Hedera are encouraged to reach out and apply for incentives to support their token’s on-chain liquidity.
Deployment and Launch
The new liquidity pools and vaults will be deployed on SaucerSwap.
A coordinated launch campaign will promote the new features to liquidity providers and traders.
Ongoing Support and Optimization
Continuous support will be provided to participating projects to ensure optimal performance.
Feedback from users will be collected and used to refine and improve the liquidity solutions.
Incentive Allocation
Selected projects will receive incentives in HBAR to bolster their liquidity.
Incentives will be allocated strategically to maximize impact on liquidity and trading volume.
Motivation: To enhance on-chain liquidity and trading volume for projects on the network by launching tokens on Hedera. Success of Amplifi Liquidity will be measured by the following success metrics:
Total Value Locked (TVL)
Trading Volume
Supported Token Projects
Benefits (Pros):
Benefits (Concentrated Liquidity Pools):
Easy entry for new liquidity providers.
Dynamic rebalancing to maintain optimal liquidity positions.
Increased user engagement through passive income opportunities.
Benefits (Automated Liquidity Vaults):
Easy entry for new liquidity providers.
Dynamic rebalancing to maintain optimal liquidity positions.
Increased user engagement through passive income opportunities.
Downside (Cons)
Risks:
Smart Contract risk
Increased complexity
Management overhead
User Education and Adoption challenges
Technical Implementation:
Development and Integration
Amplifi Liquidity will collaborate with SaucerSwap to develop and integrate the necessary smart contracts for concentrated pools and automated vaults.
Ensuring smooth technical integration and seamless user experience will be a priority.
I’m all for increasing SS liquidity and volume, but im not exactly sure what you are proposing here? SS already has concentrated LPs and smart contracts. The only other thing you mentioned is a “launch campaign”, which presumably means marketing of sorts - to which I have no objections for, but not sure why you would need approval to market or bring on liquidity to SS, I would think you could just go for it, unless you are asking for payment for those services which is not outlined in your proposal?
Thanks for taking the time to comment on the proposal.
I would like to clarify that the proposal would give Amplifi Liquidity the ability to immediately create concentrated liquidity pools outside of the normal voting process. It is important for projects to have concentrated liquidity for a number of reasons. Those are, that it can be price supportive, it is more capital efficient, increases yield opportunities for liquidity providers, and it helps to ensure minimal slippage and tighter spreads. Unfortunately, engaging in the governance and voting process each time we want to create a new liquidity pools is cumbersome and makes the business of deploying HBAR incentives to both existing projects and new ones launching on Hedera difficult if not impossible.
For those not familiar with the current V2 pool creation process please reference this link: Overview | SaucerSwap
Amplifi liquidity is not looking for any compensation from SaucerSwap. Our goal is to both support existing projects and bring new projects onto Hedera, grow TVL in a sustainable and transparent way, and increase trading volume. As part of this goal we will select projects to incentivize with HBAR.
Why not just make proposals for new pools you want to create like everybody else? I don’t know why you need free rein at this stage. Maybe you can establish a track record by creating proposals first before asking for carte blanche.
Thanks for your request for additional clarity on our proposal. Our goal is to bring additional liquidity through increased trading volumes and TVL to SaucerSwap which in turn helps grow Hedera. The existing process for creating concentrated liquidity pools is cumbersome and will slow if not outright stop the flow of these funds onto SaucerSwap. This would be unfortunate because the whole point of this proposal is to increase on-chain liquidity and make SaucerSwap and Hedera better. It would not serve the purpose of our project to “spin” up a whole host of pools. We have been and will continue to be very intentional and thoughtful in what projects are brought to SaucerSwap and Hedera. Before we would consider a project for this grant and thus creating a concentrated liquidity pool the project must be legitimate, have a good business plan, ample trading liquidity, and volume. It would not serve the long term goals of creating sustainable on-chain liquidity to create a whole bunch of random pools. Not to mention, this is resource intensive and not a good way to spend our time.
Does Amplifi have any previous experience with other crypto protocols? Or will Saucerswap be the 1st one theoretically?
From what I’ve read in your proposal it seems like Amplifi wants to manage pools/vaults on your end? Saucerswap already has a similar 3rd party company in ICHI doing this; how would Amplifi be different?
Your proposal also mentions increased liquidity/TVL/volume–how exactly would Amplifi do this?
Overall your proposal/responses are confusing for most and would be better if you explained in simpler or shorter explanations…
this sounds more like a marketing proposal with SS than an actual DAO governance proposal. the entire point of the DAO governance is that sauce/xsauce owners can vote to see which tokens get default listed, V1 yield farms, V2 LPs, LARI weights etc. Handing over this entire process to a third-party doesn’t make any sense because that means we as sauce/xsauce owners get no voting power.
Leonardo, thanks for your questions. I hope this helps to clarify them.
Does Amplifi have any previous experience with other crypto protocols? Or will Saucer Swap be the 1st one theoretically?
Yes we do. This is the first time we have encountered a barrier like this when trying to list a pool. Amplifi currently works across 20+ different chains and 30 different AMMs
From what I read in your proposal it seems like Amplifi wants to manage pools/vaults on your end? SaucerSwap already has a similar 3rd party company in ICHI doing this; how would Amplifi be different?
Great question, Yes Amplifi will manage the pools/vaults by leveraging ICHI vault technology. We collaborate with projects and ICHI to oversee and set goals for how the vault is working and then reflect this back to the project. We take care of all the set-up, overhead, and management of the DeFi liquidity. Think of it as white glove service for your DeFi needs.
Your proposal also mentions increased liquidity/TVL/volume - how exactly would Amplifi do this?
We currently have a grant from Hedera. We are working with them to identify high quality projects to incentivize through direct HBAR grants paired with their project tokens.
Thanks for your comment and the opportunity to improve our proposal.
The main driver behind this request is to avoid the cumbersome process of going to a governance process each time we want to create a new concentrated V2 liquidity pool. This not a common occurrence on other AMMs. Our goal is to identify projects and incentivize them to be a part of SaucerSwap and thus the Hedera ecosystem.
We are NOT interested in having “Free Rein” over adding and creating pools.
In our initial proposal under the Development and Integration section we outline that we will work with SaucerSwap to integrate these pools. Effectively what this is saying is that we cannot create the pools themselves. We would still require SaucerSwap to do this. Our ask in the proposal is to avoid the governance process to get the pool approved. We would then have to work with SaucerSwap to get the pool on the UI etc. This additional requirement and collaboration with SaucerSwap should serve as a gating mechanism to prevent rampant pool creation.
Personally, i think V2 pool creation should be permissionless. It would allow more liquidity to enter the protocol. I see no advantage it being permissioned, and not exactly sure why it is, unless someone can explain?
Thanks Nube, so i guess it is safe to assume it will be permissionless at some stage? And then Amplify’s will be able to do their thing at that time. So really its just a matter of when now?
Thanks for the information. To Wojak’s point is there an ETA on when V2 pool creation would become permissionless? This would satisfy the request. Thanks