Create V2 Pool for HBAR/BONZO 0.30%

Request for Comment
1

Author(s): Bonzo Finance and Amplifi Liquidity
SaucerSwap Voting Interface: N/A
Related Discussions: Amplifi Liquidity Requests The Creation of Concentrated Liquidity Pools and Automated Liquidity Vaults; Create V2 Pool for HBAR/BONZO 0.30%
Submission Date: January 15, 2025

Summary
We propose the creation of a V2_HBAR/BONZO pool with a 0.30% fee tier on SaucerSwap. This pool will enhance capital efficiency, increase TVL, and liquidity for both SaucerSwap and Hedera.

Abstract
The new V2_HBAR/BONZO pool will utilize SaucerSwap V2’s concentrated liquidity features, offering better returns for LPs, increased liquidity, and TVL

Bonzo Finance (https://www.bonzo.finance) is a vital addition to Hedera’s DeFi ecosystem, offering decentralized, non-custodial lending and borrowing services optimized for HBAR, HBARX, USDC, HTS ecosystem tokens, and wrapped (bridged) assets. Built on Aave v2’s proven framework and integrated with Hedera’s EVM and native token service (HTS), Bonzo enhances liquidity through capital-efficient lending, over-collateralized loans, and dynamic interest rates.

By introducing Bonzo Finance, Hedera gains foundational DeFi infrastructure that broadens liquidity across the network. This proposal also opens up critical liquidity channels for the SAUCE token on SaucerSwap, reinforcing both Hedera and SaucerSwap as leaders in smart contract-based decentralized finance solutions.

Motivation
For Bonzo Finance, launching with a SaucerSwap V2 pool on Hedera creates a strong foundation for sustainable liquidity and growth. V2’s concentrated liquidity feature allows liquidity providers to allocate resources efficiently by focusing liquidity within targeted price ranges, reducing capital requirements while enhancing yield potential.

This setup supports $BONZO price stability and appeals to investors by offering lower fees and tighter spreads, which can drive trading volume and deepen liquidity. For $BONZO and other new projects, V2 pools on SaucerSwap provide a scalable, capital-efficient solution, establishing the platform as the preferred choice for DeFi liquidity on Hedera.

Benefits (Pros)

  • Price Supportive: It can help stabilize token prices.
  • Capital Efficient: Concentrated liquidity pools are more efficient in capital deployment.
  • Yield Opportunities: Increase yield opportunities for liquidity providers.
  • Minimal Slippage: Concentrated pools help to ensure minimal slippage and tighter spreads.

Downside (Cons)

  • Risks: Smart contract risk, increased complexity, management overhead, and potential user education challenges

Voting

  • For: Create the V2_HBAR/BONZO pool with a 0.30% fee.
  • Against: Request revisions for further refinement.
2 Likes
2

Are you planning to also create a V1 pool?

1 Like
3

Hey Brady,
Welcome.
How’d you arrive at volatile pair fee tier?
Will the bonzo app be interacting with this pool directly?
What amount of paired liquidity will you be seeding the v2 pool with?
To piggyback on nubes question, I imagine someone will create a v1 bonzo/hbar pool, but would bonzo provide liquidity to that pool?

Thanks!

2 Likes
4

How quickly can Bonzo Finance get the sentinel report updated?

And if the report could get updated, would the team also apply for default listing as well?

2 Likes
5

Hey Nube — thanks for this question; there is no plan to instantiate a V1 pool, only a v2 pool.

6

Thanks for the welcome and these great questions !

How’d you arrive at volatile pair fee tier?
The 0.30% fee tier was chosen based on a few factors. For new tokens and those with expected higher volatility like $BONZO, this tier offers a balance between LP returns and trading costs. This fee structure has proven effective across multiple DEXs and chains for similar asset pairs, as it:

  • Compensates LPs adequately for the increased impermanent loss risk associated with volatile pairs
  • Generates sufficient fee revenue to incentivize liquidity provision while remaining competitive for traders
  • Aligns with previous v2 proposal standards for similar newly launched tokens and volatile pairs
  • Adheres to advised fee tier from SaucerSwap Labs documentation (screenshot)

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Will the bonzo app be interacting with this pool directly?
While the Bonzo Finance application won’t directly integrate with the pool at launch, the protocol plans to focus on establishing strong, organic liquidity through the V2 pool.

Post-launch, there are open discussions about implementation of an v2 LP NFT staking mechanism within Bonzo Finance that offers enhanced rewards for in-range positions to encourage active liquidity management + reduced rewards for out-of-range positions. This would incentivize optimal capital efficiency and reward users for supplying sufficient liquidity.

What amount of paired liquidity will you be seeding the v2 pool with?
It’s projected by Amplifi of an initial liquidity provision of approximately $300,000 USD split between $HBAR and $BONZO tokens; this includes:

  • Deployment across multiple price ranges to ensure adequate depth
  • Strategic placement of liquidity concentrations around the initial trading price
  • Reserve capital allocated for potential range adjustments

Finalization of exact figures by liquidity partners are being conducted and explicit amounts will be provided / updated prior to launch.

To piggyback on nubes question, I imagine someone will create a v1 bonzo/hbar pool, but would bonzo provide liquidity to that pool?
While we anticipate the community potentially creating a V1 pool, it’s our understanding that the liquidity strategy provided by Amplifi will focus primarily on the V2 pool for a few reasons:

  • Concentrated liquidity in V2 offers superior capital efficiency
  • Better alignment with long-term tokenomics & liquidity management strategies
  • Enhanced ability to manage price impact and slippage
  • More attractive yields for liquidity providers
2 Likes
7

Great catch on the Sentinal program — yes, we can / will absolutely get that updated and apply for a default listing.

The $BONZO asset has not yet been minted, and won’t be minted until closer to TGE taking place in February, so token details will be unavailable until then; the pieces that I see most critical for updating include Bonzo Finance audit reports and tokenomics information (unlocks, etc.).

Thank you for flagging this.

1 Like