PIP 4: Add Phuture Liquidity to Gnosis Chain

Name of Proposal: Add Phuture Liquidity to Gnosis Chain

Creator/s Name + Telegram/Discord ID’s: Mike Jones/ Discord ID: Pookums

Discord Link : http://discord.gg/frRD3Ck

Creation Date: 01/16/2022

What’s needed: Phuture Tokens to supply liquidity, as well as an equivalent amount of base (USDC, XDAI, or ETH)

Proposal Goal

The goal of this proposal is to add liquidity for Phuture to AMMs on Gnosis Chain.

Gnosis Chain is an Ethereum Virtual Machine (EVM) which uses a bridged DAI stablecoin, labeled XDAI once on chain, to execute smart contracts. This enables the functionality of applications which would be impossible on ethereum. It also makes governance of DAOs on-chain possible. There is a unique fairness to utilizing a stablecoin for smart contract execution, as it does not penalize late-comers to the chain, making newcomers more apt to utilize the blockchain as there is no reason to time an entry.

To explore the applications running on Gnosis Chain, visit Gnosis Chain Explorer

For these reasons, many up and coming DAOs have added liquidity to Gnosis Chain, as well as enabled their DAO’s operation to it. There are several AMMs operating on Gnosis Chain to which liquidity can be provided, including Honeyswap https://honeyswap.org/, Swapr Swapr, and Sushiswap. Incentive rewards for liquidity providers can be enabled on all of these AMMs.

Gnosis chain also has its own borrowing and lending platform, Agave Finance, which has been ballooning in liquidity. This is creating more capital with the EVM.

Current challenges this solves

ETH fees prevent DeFi from being profitable to investors who wish to make frequent trades, particularly individuals with less capital to invest. ETH fees de-incentivize voters in a DAO, who must pay high gas fees just to vote. This restricts the essential utility of a DAO as a governance structure, as evidenced by the troublingly low member participation in the most popular DAO on ETH mainnet– MakerDAO

From a marketing perspective, addition of Phuture to Gnosis Chain will expose it to users who are very familiar with DAOs and open to investing in new DAOs. Symmetric may be seen as a competitor https://symmetric.finance/, so it will be essential to detail the differences between Phuture and Symmetric.

From a product perspective, enabling functionality on Gnosis Chain will open up Phuture to DeFi investors who wish to make frequent trades. The crypto market evolves extremely rapidly, and serious investors desire the flexibility to move around their assets in order to keep up with this evolution, without gas fees that inhibit any profitability. Adding the Phuture platform to Gnosis chain will allow investors to move their funds from one index to another quickly and cheaply, making the platform more functionally appealing.


Execution plan

  1. Bridge the desired amount of liquidity from Phuture to Gnosis Chain. I would recommend at least 100K. This can be done using the Omni bridge OmniBridge. There is a one-time ETH fee to transfer funds on the Omni bridge.

  2. Bridge the desired base liquidity to Gnosis Chain. I would recommend XDAI, as it is the decentralized stablecoin which operates smart contracts on Gnosis Chain, and is the most popular stablecoin on the chain. ETH is also used as a base by many assets on Gnosis Chain, but that adds an additional risk to liquidity providers.

  3. Supply liquidity to Honeyswap and Swapr. These are the two dominant AMMs on Gnosis Chain which are very user-friendly.

  4. Enable LP staking on Honeyswap and Swapr . Honeyswap allows users to farm their LP tokens for an additional, optional reward multiplier up to 2x if they lock their LP tokens for the maximum of 120 days. The reward token on Honeyswap is xComb. Swapr allows LP staking rewards with a predetermined duration of time set by the creator of the reward pool. Enabling a high APR on Swapr should attract new users to provide additional liquidity to the Phuture pool, even if it is for a short amount of time. The reward on Swapr is the Swapr token.

  5. Once the Phuture platform launches, enable its functionality with Gnosis Chain. At that point, there should be a large group of token holders with ample knowledge of how DAOs work, that are also familiar with Phuture Finance and have invested in it already.

Conclusion

If this proposal is approved, Phuture will gain exposure to investors that are already very knowledgeable with DAOs.

Creating incentive rewards for future liquidity providers to the AMM platforms running on Gnosis Chain will attract new investors to Phuture and incentivize them to provide further liquidity.

After launch of the Phuture platform, enabling its operation on Gnosis Chain will eliminate the hurdle that gas fees presently cause on ETH. Any new blockchain who’s token price is dependent on market value requires investors to attempt to time the market, which is extremely difficult, both for new and more experienced investors. Gnosis chain eliminates that struggle by utilizing a decentralized stablecoin to execute smart contracts. This directly aligns with Phuture Finance’s goal as an index fund intended to mitigate risk.

New investors will be more comfortable investing in Phuture on Gnosis Chain, knowing that they do not need to attempt to time the market when purchasing the token necessary to execute smart contracts, and that any transactions made on the chain are extremely cheap– less than 0.02 XDAI for even the most ‘gas-guzzling’ signatures.

  • Yes
  • No

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