Title: Skynet V3 Market-Making Support
Author(s): SaucerSwap Labs
SaucerSwap Voting Interface: TBA
Related Discussions: N/A
Submission Date: June 3, 2026
Summary
This proposal introduces a market-making support structure for SaucerSwap V3 launch liquidity.
SaucerSwap V3 introduces central limit order book markets. Unlike V1 and V2 AMMs, V3 launch quality depends on active two-sided liquidity, reliable reference pricing, and sufficient depth near fair value. Dedicated market-making support can help make the initial V3 markets usable while organic liquidity and external integrations develop.
The working direction is to evaluate a collateralized financing structure under which SAUCE may be posted as collateral instead of sold upfront to acquire all required inventory. Final market coverage, inventory requirements, collateral terms, costs, custody, and risk controls remain subject to confirmation during RFC review before any binding vote.
Abstract
This proposal asks the DAO to review a Skynet market-making support arrangement for SaucerSwap V3 launch.
The objective is to support initial V3 market quality while minimizing unnecessary treasury disruption. The preferred working structure is collateralized rather than treasury-sale-based, but final terms must be disclosed before the proposal advances to a formal vote.
Current state and what changes
The V3 Launch Economics proposal establishes the initial V3 market and fee framework. It addresses market selection, maker/taker fees, maker rebates, xSAUCE fee discounts, and V3 fee routing.
This RFC addresses a separate launch operations question: how the DAO should support early order-book liquidity.
Current state:
- V3 launch markets require active liquidity support to be usable from day one.
- The DAO treasury is primarily SAUCE-denominated.
- Acquiring all required market-making inventory through upfront treasury conversion may create unnecessary execution pressure.
Proposed change:
- Evaluate a Skynet market-making arrangement for V3 launch support.
- Prioritize a collateralized structure where SAUCE may be posted as collateral rather than immediately sold for all required inventory.
- Finalize market coverage, collateral, cost, custody, and risk terms during RFC review before any binding vote.
Motivation
Order-book markets are most useful when users can see and execute against reliable two-sided liquidity. Thin or discontinuous books can make a technically live market feel unusable and can weaken early confidence from users, integrators, and external market makers.
A market-making support arrangement can help:
- maintain visible bids and asks;
- improve early user experience;
- support reference-price alignment;
- provide more reliable launch conditions for traders and integrators;
- reduce the risk that initial V3 metrics are distorted by thin liquidity.
At the same time, the DAO should avoid unnecessary pre-launch treasury disruption. A collateralized structure may preserve flexibility by allowing the DAO to support market-making inventory without selling a large amount of SAUCE in a short period.
Specification & Rationale
1. Market-making support provider
The DAO should evaluate a Skynet market-making support arrangement for V3 launch liquidity. Final authorization, if any, should be based on disclosed terms before the proposal advances to a formal vote.
2. Initial market scope
The launch market scope under discussion is the initial V3 market set:
- HBAR-USDC
- WETH-USDC
- WBTC-USDC
- SAUCE-USDC
- USDT0-USDC
Final market support remains subject to Skynet confirmation and DAO review.
3. Expected structure
The preferred working direction is a collateralized financing structure. Under this model, SAUCE may be posted as collateral to support market-making inventory or financing rather than requiring the DAO to sell a large amount of SAUCE upfront.
The final structure may be collateralized, inventory-provided, or hybrid. The selected structure should be disclosed before any formal vote.
4. Terms to finalize before vote
The formal proposal should specify:
- supported markets;
- inventory requirements by market;
- required SAUCE collateral amount;
- collateral treatment, haircut, and return obligations;
- retainer, risk premium, financing cost, or other economics;
- custody and control of collateral and inventory;
- risk controls and pause conditions;
- treatment of market-making PnL, losses, rebates, and fees;
Rationale
A direct inventory-provision model may require the DAO to acquire or convert assets for each market. Because the treasury is primarily SAUCE-denominated, that could require selling a material amount of SAUCE in a short period.
A collateralized structure may support the same launch objective while reducing immediate market impact from treasury conversions. This preserves treasury flexibility and gives the DAO a clearer path to evaluate costs, collateral risk, and operational controls before execution.
Risks / Considerations
Counterparty and collateral risk
If SAUCE is posted as collateral, the DAO may take counterparty, custody, and collateral-treatment risk. Final terms should define custody, permitted use, default treatment, return obligations, termination rights, and any collateral haircut or risk premium.
Market-making risk
Market making can lose money due to volatility, adverse selection, stale pricing, inventory imbalance, or technical failure. Final terms should define supported markets, inventory limits, pause conditions, risk controls, and loss treatment.
Economic cost
A collateralized or inventory-provided structure may include a retainer, risk premium, financing cost, or other economics. These costs should be disclosed before the proposal advances to a formal vote.
Timing risk
V3 launch readiness is time-sensitive. Opening the RFC now allows the DAO to review the structure while final terms are clarified. Binding authorization should wait until those terms are disclosed.
Open Items During RFC
- Whether Skynet will support all five initial V3 markets at launch.
- Required inventory by market.
- Whether the final structure is collateralized, inventory-provided, or hybrid.
- Required SAUCE collateral amount.
- Collateral treatment, haircut, and return obligations.
- Any retainer, risk premium, financing cost, or other economics.
- Custody and control of collateral and inventory.
- Risk controls and pause conditions.
- Treatment of market-making PnL, losses, rebates, and fees.
- Final execution timing relative to V3 launch.
Voting Options
For: Advance with a Skynet market-making arrangement for V3 launch support, subject to final disclosed terms for market scope, collateral, economics, custody, risk controls, and implementation authority.
Against: Do not authorize the proposed Skynet market-making arrangement.
Abstain: Formal abstention.