Proposal to Create a V2 SAUCE/KONA Pool with 0.30% Fee Tier

Request for Comment
1

Author: Gh0st from KONA
SaucerSwap Voting Interface: N/A
Related Discussions: N/A
Submission Date: 11/23/24

Summary

We propose the creation of a V2 SAUCE/KONA liquidity pool with a 0.30% fee tier on SaucerSwap. This pool aims to reduce slippage and enhance liquidity efficiency for the KONA token. Unique to KONA is the ability to exchange the token for a high-quality, real-world product—100% Kona Coffee—granting the token immediate real-world utility.

Abstract

KONA is among the first community projects on Hedera that ties directly to a real-world product, offering 100% Kona Coffee. By definition, it is a Real World Asset (RWA), meaning it is a tokenized asset linked to a tangible product, bridging blockchain technology with real economic value. Creating this V2 liquidity pool will enable greater accessibility to the KONA token, and allow for greater participation in the broader Hedera ecosystem. Adding this specific subcategory of TVL to SaucerSwap, homegrown RWA projects launching natively on Hedera, broadens the asset diversification and strengthens the overall token offering on the network’s leading DEX.

Motivation

SaucerSwap V2 is more efficient than SaucerSwap V1 due to its implementation of concentrated liquidity. This means greater volume can be enabled, broadening access to new and existing users. We posit that this efficiency will enable more trading activity not only in the SAUCE/KONA V2 pool, but across the entire platform via its strategic pairing with the SAUCE token and SaucerSwap’s ability to route trades through multiple pools. Future LARI rewards in KONA could provide additional incentives, boosting user engagement and encouraging broader token distribution.

Specification & Rationale

KONA is a unique intersection between web3 and the real-world experience of enjoying premium coffee. To support this vision, we propose a more efficient liquidity solution for the token, which will decrease user fees via improved capital efficiency. Lowering costs will make staking and interacting with the platform more appealing, aligning with the goal of encouraging a healthy and sustainable web3 business model where users benefit tangibly from their participation.

Benefits (Pros)

  • Enhanced staking incentives for users on SaucerSwap, driven by efficient returns and unique real-world utility.
  • Seamless integration of web3 participation with the opportunity to earn premium real-world products (100% Kona Coffee).
  • Improved liquidity efficiency and trading conditions for the KONA token, reducing slippage and transaction costs.
  • Strengthened overall market health for KONA, contributing to sustainable growth.
  • Increased token utility through potential future LARI rewards and other incentive distributions.
  • Boosted total value locked (TVL) on SaucerSwap, contributing to the growth and attractiveness of the platform.

Downside (Cons)

  • No significant downsides identified.
  • Potential risks include fluctuations in market conditions, limited user adoption, or slower-than-expected growth in liquidity.

Voting

  • For : Create the V2 SAUCE/KONA pool with a 0.30% fee tier.
  • Against : Do not create the V2 SAUCE/KONA pool.

Conclusion

Thank you for considering this proposal. We believe that creating this V2 SAUCE/KONA liquidity pool will improve trading efficiency, increase participation, and provide real-world utility to SaucerSwap users. This step will directly enhance liquidity depth, reduce trading costs, and make the KONA token more readily available to users. Thank you for supporting KONA’s growth on SaucerSwap.

2

For the record, this is the same Gh0st on the SaucerSwap discord. No imposter here. ඞ

I’ll take a detailed look later, but I do want to ask about the fee tier. Why 0.30% as opposed to any other fee tier?

1 Like
3

Yeah, interested in the fee structure…posted on vrjams proposal similar…that it seems like it should be in the 1% fee tier.
Love the project and product!

1 Like
4

Thanks for the question Barb! I chose 0.30% because according to the SaucerSwap docs that is what volatile pairs should request. It was also suggested to me by a team member when queried.

5

Hey SmuggMuggler! Same answer as Barb - that’s what the documentation suggests and I verified it with a team member. I think it’s consistent with a project like GRELF in terms of tokenomics.

1 Like
6

I’ll be sure to remember asking the team for recommendations on the fee tier is a option. Like the docs are very good, but asking them is nice.

Final substative question. Liquidity fragmentation is another downside risk for creating a V2 pool, as theres liquidity split between multiple pools and this making them less efficient.

What liquidity plans are in place for the V2 pool? A liquid migration from V1 to V2? A whole new set of liquidity for the V2 pool?

1 Like
7

Yes I’ve been very fortunate to receive guidance about the Kona project from several OG builders in the Hedera space! Resources are limited in such a nascent industry so I’m grateful for any help.

Regarding the V2 pool - currently the plan is a liquid migration. I’m always open to look at adding more liquidity if necessary.

8

And the final question.
When is the planned proposal submission date?
You don’t have to announce it, but it would be nice to get a heads up earlier so people can get ready ahead of time. But at least with the proposal voting periods (for both the submission and the election periods) been extended to 4 days (from the initial 2 days) each, it’s not super stringent to get people and their SAUCE in order at voting hour 1.

That said, there is the consideration of a major US holiday, the REAL Thanksgiving :us::turkey: (sorry Canada eh), so I would suspect a decent chunk of people would be away from their wallets during the extended weekend.

1 Like
9

Thanks again for another great question and for pointing out the unmistakable dominance of US-based Thanksgiving.

I’m aiming to submit the proposal closer to this weekend, after the tryptophan has worn off. I’ll be sure to announce it in the SaucerSwap discord (& X) prior to the submission. Thank you again for the suggestions!