Liqwid-Minswap DAO Token Exchange, Liqwid DAO Protocol Owned Liquidity, LQ/MIN pool on Minswap v2 with Triple Farm Incentives

Temperature Check
21

I’m sure we can all agree Liwid is premier lending and borrowing platform in the ecosystem with rathers to UI/UX and functionality.

What the team at Minswap has accomplished over the past two years is outstanding. However, objectively speaking, implementing this proposal would be consolidating more power to an already dominant entity (Minswap DAO).

In an ideal world, Protocol Owned Liquidity (POL) would not be fragmented across different DEXes, but pooled together and accessible to all DEXes equally. These lowers the probability of any type of collusion or forming of an oligopoly.

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22

I am not sure of your math. What I calculate based on a $1M exchange of each:
$1M USD equals 1,694,915.25 ADA at $.59 USD/ADA
1,694,915 ADA converted to MIN is 27,812,852. Liqwid DAO receives 27M MIN Tokens
1,694,915 ADA converted to LQ is 242,889. MIN DAO received 242,889 LQ Tokens
MIN Current Circulating Supply is 1,082,367,249
LQ Holders receive 2.5% share of current DAO ownership

LQ Current Circulating Supply is 4,571,920
MIN Holders receive 5.3% share of current DAO ownership

LQ holders will retain a large share of DAO voting power than MIN. Further, 1.5% share of voting of the DAO is hardly going to run away with governance as there is still 98.5% of circulating supply voting from community and team.

Also, from the proposal:
B. Minswap DAO agrees to delegate 50% of their LQ voting power to Cardano community members, SPOs or Liqwid DAO stewards of their DAOs choosing.

So this 1.5% is further reduced because most of it is delegated voting to other members. I believe the idea that MIN DAO will have “control” of Liqwid voting is a red herring.

**The data will fluctuate based on exchange prices of ADA, MIN, LQ. If the total $3M were exchanged the percentages would be higher by (7.7% MIN for LQ DAO and 16% LQ for MIN DAO). Liqwid gains more governance on a percentage term than MIN DAO for higher amounts of USD.

We need deeper liquidity, we have from day 1. I was disappointed when the first proposal to deepen liquidity failed as I believed we needed it then. I think this proposal is preferable to triple farming where the majority will farm to sell rewards.

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1,694,915 ADA converted to LQ is 403,551 LQ. The FDV of Minswap is twice that of Liqwid, meaning that a 1:1 USD exchange equals out to a 1:2 exchange going by token supply doesn’t it?

Even with 200k LQ they would have the ability to unilaterally decide every proposal that has ever been put up for vote to date I believe.

Why pursue this when the objective is increased PoL/liquidity depth, and we are now generating $30,000/month and rising in DAO revenue. We can allocate DAO income to building an LP position naturally without giving away massive chunks of supply to a third party defi app for accelerated PoL growth. We have ~700k ADA depth currently. We don’t need a massive dramatic/instant increase in depth… a steady climb achieves the same goal in a reasonable time frame, especially considering revenue has increased month over month.

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25

OK, well I mistakenly used a DEX to calculate the ADA to LQ conversion without realize the slippage would give me a faulty number so you are right, quite a bit higher than what I posted. It does give them 8.5% of which 50% would be staked to community pools via delegation. I still think it is insignificant on the grand scale of governance. 4% would not be enough voting power to sway a vote if all members are voting. If all members are not voting, then perhaps a concern. However, that is a problem for Liqwid to solve to raise engagement of voting or at least get people to delegate to those who do.

“Even with 200k LQ they would have the ability to unilaterally decide every proposal that has ever been put up for vote to date I believe.”

I do not understand how you can conclude this if they have 8.5% of the LQ in circulation, even assuming they act in bad faith and do not delegate the 50%. I think you are making catastrophic assumptions that are not realistic, like a black swan event. Something to think about, implement certain controls, but not something you actively design around.

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Some have talked about the power of vote concentration as if it were irrelevant. First let Liqwid solve the problem of low voter turnout and then give 8.5% to Minswap. By the way, I’m still not sure if that 8.5% is stakeable and can it rise to 20% in 2 years?

On the other hand, Minswap is a DEX whose TVL is 50% based on its own token. MIN is such an inflated token and is currently overvalued. I would never exchange 1% LQ token for 0.5% MIN tokens because I value the LQ token much more. MIN is overrated, LQ undervalued.

Minswap’s market position is based on inflating the DEX token and may not be sustainable.

I’ve been thinking all this time.

My vote is NO

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I moved my comments on POL to here. Protocol Owned Liquidity - 'POL'- DAO Treasury

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