Positioning Liqwid for Long-Term Growth and LQ Token Appreciation

[JakeMN]

There is already a few good proposals mentioned that I can agree with. With some of those ideas incorporated here, I am proposing:

1. Eliminate buyback
2. Distribute Programmatic Rewards for each month, August to the date of any approved DAO vote, as it has already been earned for the 10% NET margin to stakers. Do not arbitrarily fix it at the August amount.
3. Reduce LQ staking rewards to zero. I believe this was used to bootstrap the protocol and do not believe this is needed any longer.
4. Maintain net margin at 10% for DAO/ 10% staking
5. Redirect 10% Programmatic Distribution to POL payments. Require a new vote on continuing this every 3 months, contingent on publication of the quarterly report. In other words, stakers agree to use this revenue to pay down the POL if and only if reports are issued that detail the revenue raised, how much is directed to POL/Operating budget etc. Because this needs a re-vote for continuance, it automatically reverts to 10% PD to stakers once POL is repaid. I think to maintain support for this, it needs to be locked in place to revert back. I do not think the community will accept a “verbal commitment” to change things back in the future. There is no guarantee that this will ever come up for a vote again since the community does not really control what makes it to an on-chain vote. Therefore, the team should be forced to continually justify taking staker revenue towards the operating budget.
6. Change any PD from the LQ distribution back to the native CNT in which it was generated to eliminate LQ selling.
7. Isn’t LQ staking still considered safety pool? How are LQ stakers compensated for taking on the risk of their LQ being slashed? We need to think about this…if there is no benefit to staking LQ, then the safety pool will not have any LQ in it for an extreme event, and it is a huge risk to the solvency of the protocol. I think if these changes go through, I have no reason to hold LQ in the protocol and will remove my stake. Selling LQ as only a governance token does not have value in my opinion. The value proposition has always been sharing in the revenue of the protocol.

It is difficult, as mentioned above, to propose a complete set of ideas, as the community is not involved in day-to-day operations or discussions with potential investors. We do not see what deal you are providing to them, and this whole thing appears to me to be very one-sided to their benefit. What really rubbed salt in my eyes is seeing that PD would be capped at the August amount, without even detailing what we would forgo for that decision. The onus is on the management company to defend and garner support for changes to the operational posture. This should be done with full transparency to maintain trust. If you lose trust, you lose the community.

[gil]

Thanks Florian for reply.
”Investors are ready to deploy capital, but the current level of LQ issuance must be addressed, as it remains the root cause of the problem.” → understandable, that’s the reduce emission part (2.5 to 1 %, and no market incentives). Ok. If it’s all they need, very good, and keep PD paid in $LQ through buyback to sustain the price of their investment.

”The current low LQ price is largely a consequence of decisions made two years ago” → that’s a bit of stretch, emissions have been lower for a while now, and price has reacted more to governance proposals than anything else I would say.

Honestly, it seems that the proposal is reaching for both:

• new investors protected from too much emissions
• more funding for Liqwid, on top of said new investment

As for other ideas to repay the POL debt in a responsible and realistic way:

• do a new public sale, towards Ada holders (the current price of $lq might interest people), instead of towards a private investor (you do have $LQ tokens you ready to sell)

• get some actually aligned investors who don’t want to screw $LQ stakers, and that are ready to wait for Liqwid growing, new markets, more capital supplied and borrowed, and see the value of revenue share (both for themselves, and for people getting enthusiasts about buying and staking $LQ, supporting their investment). Though I am aware if an investor suddenly get millions of $LQ and stake them the overall revenue share will be lower for the rest of us.

• dev harder, push for what you deserve, get the new markets quickly to generate more revenue (might not be realistic, but who knows how much the devs actually see Liqwid winning and want it)

• (or even try Catalyst or treasury withdrawal, who knows, and is it that much hard work to write + market proposals ?)

  I appreciate you and the on-going open conversation.

[JakeMN]

I also think the continual shifting of goal posts and information loses trust. Just a couple months ago the launch RWA forum post stated:

Launch of Direct Lending Markets on Liqwid (updated)

Update on the proposal Following the initial temperature check within the Liqwid Governance Forum , this proposal seeks to establish a whitelisted market on Liqwid, operated by Quod Agis, to provide lending facilities backed by Real-World Asset (RWA) collateral. (See product description here and FAQ here. The underlying collateral assets will be issued as CNT utility tokens, minted only after borrowers successfully complete the onboarding process through a recognized credit gate. Within this f…

“Revenue Distribution, where LQ stakers and Liqwid DAO are earning a percentage of the interest generated by these markets.”

But now, just a month later, that is proposed to be eliminated. It feels like things are stated one day to garner support for them with the idea to change them later.

[JakeMN]

I like your idea of a public sale. I think if a proposal is generated to reduce LQ distributions, like the market rewards and change PD rewards back to the CNTs (instead of converting to LQ), in conjunction with the public sale, I think it would generate support for a premium to the VWAP.

[Laaky]

Hi,

So we basically all agree that we need to stop LQ emissions.

Regarding staking revenue sharing, this is the only thing that link the protocol value to the LQ token and thus removing it would convert the LQ value from investment to trading speculation which is not what i’ve signed for.

Here is how i would go about it, split this vote in two:

• First vote (LQ emissions):
  • Remove the lending incentives as the protocol supply rates are enough by itself.
  • Set the LQ staking rate to 0% (inflating the token doesn’t bring value to stakers)
• Second vote (Protocol revenue share):
  • Stop buying back LQ and send qtokens directly to stakers addresses (this can be automated so no more wen PD).
  • To keep utility for aquafarmer, use it to virtually increase the staking share of stakers with an aquafarmer.
  • Then regarding the rates:
    • Option 1: Redirect 10% to loan repayment with continuation vote every 3 month with KPI as per @JakeMN proposed
    • Option 2: Redirect 5% to loan repayment with continuation vote every 3 month with KPI as per @JakeMN proposed (this is more conservative and can be reevaluated every 3 month)
    • Option 3: Keep rate to 10%

I think the first vote can be settled quickly.

For the second one, we need to look at forecasted data repayment timeline according to current revenue.

Side question: Why does Liqwid Labs never apply for catalyst proposals, if the teem needs development money, it is a good way to do it. I would vote for it and you could use the Ada supply to vote for it, the same as Minswap do.

Speculation: removing staking rewards (LQ) might balance liquidity between Staking and LP.

[gil]

@FlorianVolery
So here is my best alternative:

• public token sale (open, towards Ada holders)

• 2.5 % to 1 % for staking

• 0 market incentives

• lower the stakers’ revenue share from 10 to 7.5 % for a year or two, paid in $lq buybacks just as it is now

The current price might interest quite a few people. I can see it attracting people excited to stake $lq for share of a growing revenue. Let the actually involved community back you. And this does not prevent any private investor to jump in through Ada. You might get a better mix of investors behaviour through this.

Buybacks do offer guaranteed initial buy pressure followed by potential partial sell pressure, so doing more to sustain the price than no buybacks.

Sidenote, I understand the financial perspective on the following statement, but maybe avoid mentions of $lq stakers and DAO members being presented as ‘we ask for free rewards’ kind of people. We actually back you by not selling (better value of your debt collateral, better refinancing opportunities), by getting you revenue through our supplied assets and our borrowing activities, by risking our $lq in the safety staking module, and simply by using and talking about the protocol.

[gil]

This, this, this and this. 100 %

[ADA_Matt]

What would trigger LQ demand if LQ value is decoupled from protocol growth/revenue? Why would someone buy LQ if they don’t share in any of the growth & increased revenue?

What financial metrics would be used to decided it is financially sustainable to re-start program rewards? Any reason we don’t include those metrics & define the restarting of rewards in the current proposal? This clarity could ease minds.

[nufnuf]

If the objective of the proposal is LQ token appreciation

1. Discontinue net margin as set percentage for both DAO and LQ stakers

2. Discontinue market participation rewards from the LQ emission

3. Discontinue LQ staking rewards from the LQ emission

4. Discontinue LCIMP rewards in LQ

5. Discontinue distribution of PD rewards in LQ

6. Pay outstanding programmatic rewards out in full

7. Continue with changed programmatic rewards

Discontinue net margin as set percentage for both DAO and LQ stakers.

Instead of a 10%/10% net margin split between DAO and LQ stakers redirect all 20% of revenue and 100% of loan origination fee to staking equally available with the same benefits for every wallet proportional to its staked LQ: community, core team, founding entities, private investors, DAO.

With POL loans fully repaid, 12.582m LQ would go back to the DAO wallet currently holding 756k LQ.

Based on past experience with private investors, it’s fair to assume the core team has a preliminary agreement with the investors who already advanced $3.5m for partial repayment.

If 13.339m in the DAO wallet were staked alongside 3.5m already staked, its share would be around 79% of all PD rewards, more than the current 10% net margin (50% of 20%).

DAO share would gradually lower once investors’ monthly vesting period would start following a cliff.

The longer there is a cliff for private investors, the longer the DAO will be able to accumulate funds at maximum capacity each month instead of private investors.

Discontinue market participation rewards from the LQ emission

Less sell pressure on LQ.

Discontinue LQ staking rewards from the LQ emission

Less sell pressure on LQ. Staking at 1% only is not competitive with ADA staking or with staking in other DeFi protocols anyway.

Discontinue LCIMP rewards in LQ

With LQ current price around $1 we can rather distribute 500 in stablecoins each month. Less sell pressure on LQ.

Discontinue distribution of PD rewards in LQ

Change the distribution of PD rewards from LQ to ADA.

Pay outstanding programmatic rewards out in full

It’s very risky to set a precedent of retroactively backdate outstanding programmatic rewards. It would stick Liqwid with a bad reputation and a huge disadvantage when compared with competitors/DeFi protocols. The cost of fixing the damage by lost users/token holders, lost TVL, lost market cap among CNT would be very high and it would take a lot of time. There is a limited number of DeFi users in the Cardano space. Liqwid has no luxury of operating on several blockchains with users on each chain like AAVE has. It’s more appealing for investors to invest in a protocol with growing user base than reduced user base.

Exclude all founding entities rewards share they give up each month from the calculation. This way the total amount distributed will be lower.

Continue with changed programmatic rewards

Change distribution of PD rewards to every 2 weeks in ADA. Predictability and punctuality are the key when it comes to rewards. ADA staking rewards are every 5 days. Strike protocol has rewards every 15 days. Strike has no rewards in its own token, only revenue share from opening fees, with 82% of all circulating supply staked.

If the DAO wallet got staked, 83% of LQ circulating supply would be staked in the protocol, very similar number to Strike token.

With no weekly market participation and staking rewards redirect the core team time spent on calculation and quality check to execute PD rewards with a 2-weekly schedule. Have a threshold for a low revenue assets when to execute its rewards.

Have a follow up vote how DAO PD rewards are used

For example, continue with LQ buyback and at what percentage: 0/25/50/75/100 or hold a mix of ADA, LQ, stablecoins, BTC.

[_garcia_86]

A lot of the recent discussions in the forum share a common theme:

people want LQ to grow in value, and they also want to keep some rewards for participating in the protocol.

We’ve seen that high incentives alone haven’t translated into stronger long-term price performance. At the same time, removing rewards completely would discourage participation and reduce liquidity.

This proposal aims to take a balanced approach that supports long-term growth while still rewarding the community.

Proposed income split

60% → DAO Treasury

A stronger treasury makes the protocol more resilient and more ready for growth.

This funding can support development, audits, infrastructure, treasury diversification, and institutional partnerships.

30% → LQ Buybacks (locked permanently)

This portion funds regular on-chain buybacks.

All purchased LQ is sent to a locked, non-circulating vault.

This reduces circulating supply over time and creates steady buy pressure — a simple, predictable form of value accrual.

10% → Staking Rewards

Staking rewards stay alive, but at a sustainable level.

This keeps stakers engaged and ensures governance participation remains strong, without recreating the excessive dilution we saw in the past.

Emissions

This proposal does not change the current emission schedule.

If emissions need to be revisited later, that can happen in a separate, focused proposal.

Transparency

To maintain trust and clarity:

• Monthly public updates on treasury activity, buybacks, and reward distribution

• Quarterly community review

• All transactions on-chain and verifiable

This keeps the process open and accountable for everyone.This proposal doesn’t try to overhaul everything at once.

It introduces a simple, steady framework that supports long-term token value, preserves meaningful rewards, and keeps the community aligned as Liqwid continues to grow.

Looking forward to hearing everyone’s thoughts and feedback.

[gil]

Interesting option.
It would reduce the effective revenue share $LQ stakers from the community get, but it has the advantage of not violating the core vision of $LQ as a revenue generating token linked to the protocol success.

With such proposal, I would value even more a public token sale (not preventing any investor to participate) to give the community a chance to get a higher share of the protocol instead of a small group of investors, which is important because of voting, and to get different holding/selling behaviours.

“It’s very risky to set a precedent of retroactively backdate outstanding programmatic rewards…” → this is very well phrased and I agree.
The data hasn’t been shared (yet) with us, but I imagine it’s a significant difference with August due to higher repayment activities and liquidation. I guess it’s tempting for the team to see this money go towards funding, but this money, under current agreement/framework, is due to stakers, plain and simple. Breaking this is like Nunuf says, a bad precedent at the very least, even if the community turns out to support it because it shows uncertainty on the matter. On the opposite, I would value a governance proposal to lock that revenue share ratio for a while.

I appreciate the effort made to compare to another protocol too. It gives some context, grounding, awareness of the possibilities.

I don’t think PD every 2 weeks would be necessary, once a month is already frequent enough to me. Sounds like extra work for not much benefit.

As for not continuing the LCIMP. Well that’s kind of a drop in the bucket in you look at the number. But not sure what’s the real value of it is. Are the LCIMP posts actually good ? And do they really get visibility ? And is that really what make people participate in Liqwid anyway ? And from looking on-chain, are the winners selling ? (one could think if they are aware of the LCIMP and putting in the effort they might be interested in the protocol and in holding/staking $LQ)

[nufnuf]

Yes, it would completely freeze LQ emission. There would be no LQ coming into circulation. The only way left to get LQ would be on DEX, until some of new investors would get their monthly LQ from the vesting schedule and decide to sell.

As to whether PD rewards should be distributed in ADA or LQ. If the DAO wallet gets staked it will harvest almost 80% of PD rewards. That’s why I mentioned a follow up vote how much of DAO PD rewards could/should be used in further LQ buyback or other coins/tokens. If DAO wants to hold for example stablecoin it can just take its cut from earned revenue in the desired stablecoin equal to its share.

If 20% of PD rewards are distributed in ADA to LQ stakers, core team, seed round investors, there is zero LQ selling from those rewards.

[Yoven]

You are making an excellent case here on how this situation should be handled @nufnuf. I hope @FlorianVolery is paying attention before it’s too late. If I may add a suggestion to your proposal I would lock it down for a year so no changes can be made to set parameters. Finally. I will say that things have become real bad when a community member proposes a better plan than the actual team behind the protocol. This isn’t governance this is an insult to the Liqwid community from a team that has been gatekeeping ‘governance’ since day 1.

[FlorianVolery]

To everyone,
I’ll take some time to carefully review your comments and proposals. Thank you for sharing your thoughts — I appreciate the constructive inputs.

[_garcia_86]

@nufnuf

If the objective of the proposal is LQ token appreciation

1. Discontinue net margin as set percentage for both DAO and LQ stakers
2. Discontinue market participation rewards from the LQ emission
3. Discontinue LQ staking rewards from the LQ emission
4. Discontinue LCIMP rewards in LQ
5. Discontinue distribution of PD rewards in LQ
6. Pay outstanding programmatic rewards out in full
7. Continue with changed programmatic rewards

Discontinue net margin as set percentage for both DAO and LQ stakers.

Instead of a 10%/10% net margin split between DAO and LQ stakers redirect all 20% of revenue and 100% of loan origination fee to staking equally available with the same benefits for every wallet proportional to its staked LQ: community, core team, founding entities, private investors, DAO.

With POL loans fully repaid, 12.582m LQ would go back to the DAO wallet currently holding 756k LQ.

Based on past experience with private investors, it’s fair to assume the core team has a preliminary agreement with the investors who already advanced $3.5m for partial repayment.

If 13.339m in the DAO wallet were staked alongside 3.5m already staked, its share would be around 79% of all PD rewards, more than the current 10% net margin (50% of 20%).

DAO share would gradually lower once investors’ monthly vesting period would start following a cliff.

The longer there is a cliff for private investors, the longer the DAO will be able to accumulate funds at maximum capacity each month instead of private investors.

Discontinue market participation rewards from the LQ emission

Less sell pressure on LQ.

Discontinue LQ staking rewards from the LQ emission

Less sell pressure on LQ. Staking at 1% only is not competitive with ADA staking or with staking in other DeFi protocols anyway.

Discontinue LCIMP rewards in LQ

With LQ current price around $1 we can rather distribute 500 in stablecoins each month. Less sell pressure on LQ.

Discontinue distribution of PD rewards in LQ

Change the distribution of PD rewards from LQ to ADA.

Pay outstanding programmatic rewards out in full

It’s very risky to set a precedent of retroactively backdate outstanding programmatic rewards. It would stick Liqwid with a bad reputation and a huge disadvantage when compared with competitors/DeFi protocols. The cost of fixing the damage by lost users/token holders, lost TVL, lost market cap among CNT would be very high and it would take a lot of time. There is a limited number of DeFi users in the Cardano space. Liqwid has no luxury of operating on several blockchains with users on each chain like AAVE has. It’s more appealing for investors to invest in a protocol with growing user base than reduced user base.

Exclude all founding entities rewards share they give up each month from the calculation. This way the total amount distributed will be lower.

Continue with changed programmatic rewards

Change distribution of PD rewards to every 2 weeks in ADA. Predictability and punctuality are the key when it comes to rewards. ADA staking rewards are every 5 days. Strike protocol has rewards every 15 days. Strike has no rewards in its own token, only revenue share from opening fees, with 82% of all circulating supply staked.

If the DAO wallet got staked, 83% of LQ circulating supply would be staked in the protocol, very similar number to Strike token.

With no weekly market participation and staking rewards redirect the core team time spent on calculation and quality check to execute PD rewards with a 2-weekly schedule. Have a threshold for a low revenue assets when to execute its rewards.

Have a follow up vote how DAO PD rewards are used

For example, continue with LQ buyback and at what percentage: 0/25/50/75/100 or hold a mix of ADA, LQ, stablecoins, BTC.

I’m sorry but this has so many erros

Basically it

• Rewards large stakeholders disproportionately

• Eliminates incentives for small stakers

• Centralizes governance power

• Removes LQ utility

• Creates contradictions inside the proposal

• Bundles too many changes into one vote

• Hurts retail, liquidity, and TVL

• Prioritizes treasury accumulation over user growth

This combination is politically and economically unviable.

[gil]

I might change my mind and agree to zero reward for LQ stakers for a while, only if full data transparency about expenses and revenue, and with a clear KPI based path to reactivate rewards all the way to 10 % (and beyond ?) :

. assess protocol revenue and expenses every 6 month,
. have a revenue threshold to reactivate PD 2 % at a time
=> in 1 year of good enough revenue we get back 4% PD, in 2 years 8 %.

This gives predictability, goal clarity. It stops the fear of having the team just always changing stuff and the goal.
It looks professional for outside investors.
It’s a clear definition of success or failure : either Liqwid is profitable or not.
I’d like to know also that during this time devs’ salaries are not as extravagant as they can be sometimes (and I don’t mean not extravagant compared to the industry, I mean not extravagant by themselves in the context of working on a not yet profitable project for which the existing holders/investors/community conceded something), and that the overall costs are not expanding but rather optimised.

This could be acceptable for me, which is not the case of a proposal with half reported data, twisted arguments, and asking for everything without defined metrics to assess success nor a path to return to the advertised and agreed on LQ token value proposition.

[nufnuf]

Ok guys, here is my update:

Why I have changed my opinion and why I am going to support this proposal.

After digging deeper and getting more info what this proposal is solving and also what I have missed in it, here are the further details.

DAO has debt of $5m.

$3.5m was advanced by someone and already repaid.

$1.487m is still borrowed by DAO.

By repaying the full $5m, DAO only gets back to square 1, out of debt. DAO needs funding every year for its operation.

What do we need to do?

Step 1. repay $5m in debt

Step 2. build up DAO reserve

Step 3. generate yield from reserve to cover DAO expenses in full

Step 4. re-activate revenue share for LQ stakers

How do we do it?

Combine 2 income streams from the LQ token sale and redirect 20% of revenue to DAO.

LQ token sale

DAO could sell a large share of tokens to investors but we would risk losing governance control over the protocol and could be exposed anytime to sell pressure once they get tokens, no matter what they say now. Therefore, DAO should sell only a certain amount of LQ tokens.

The OTC buyback from seed round investors a year ago comes in handy. Also, all reductions of staking and market participation rewards is not wasted as it enable DAO to capitalize on those tokens.

A full 20% of revenue redirect to DAO

Why does this proposal want to use all PD rewards from now on?

DAO needs to repay its debt asap. A half cooked solution with part of the revenue to LQ stakers would just delay the whole process of building up the reserve.

Why are outstanding PD for the months of Sep-Nov fixed to the August amount?

Half of the borrowed volume on protocol was repaid past October 10th. Almost doubling revenue from it would help DAO tremendously with its debt repayment, instead of rewards being dumped on the market for nothing. The sooner DAO repays its debt, the sooner DAO can start to build its treasury reserve.

Why was there no proposal to keep PD as in August sooner?

No one could forecast the market dynamics, how much or when a large amount of debt on the protocol would be repaid. That’s why there was no proposal until now to redirect 20% of revenue from repaid debt.

When will PD rewards be re-activated?

When the reserve is able to generate yield to finance DAO in full. Team is not giving out any date so as not to give a false projection. There are too many external factors that can influence the time window.

What are the benefits of having a reserve instead of debt?

Building reserve will allow DAO to:

generate yield

less crypto market instability risk

no collateral price risk

no liquidation risk

no HF monitoring

no flash crash risk

no debt accrued

Where does the DAO reserve build come from?

1. V2 lending, soon V3

2. RWA with tokenized gold and direct lending

3. Bitcoin DeFi

4. new markets like Midnight or RealFi

Each stream of revenue will have its own community of users and borrowers.

The founders and core team are intact and battle-tested over the years. They have a track record of delivering the top DeFi protocol on Cardano. Even our competitors use their solutions, one uses Liqwid prices as their oracle source, and the other uses Agora for its governance.

This proposal is a major shift for Liqwid. It will enable full financial independency for its DAO. A fully funded DAO will enable new development and innovation of the protocol with more robustness in TVL, TVB and LQ market cap.

[geoff]

Hi everyone,

To introduce myself, I’m a committed participant in the Liqwid ecosystem–I’m a borrower, supplier, and LQ staker. I want to start by saying how impressed I am with what the Core Team has built. In my view this protocol is, to date, the premier DeFi product on Cardano, and I have immense respect for the work that has gone into building and maintaining it.

In writing this my aim is to propose a middle path that can satisfy the Core Team’s financial needs presented in Florian’s post while honoring the commitments made to the Community.

A Potential Compromise

We shouldn’t have to choose between a solvent protocol and a content Community. I hope that with the following proposed compromises we can achieve both.

The “Debt-Triggered” Revenue Pause (Solving the Net Margin)

Instead of permanently cutting the Staker Net Margin to 0%, it should be conditional.

The proposal should explicitly state that the reduction of Staker Net Margin to 0% is temporary and tied to the debt. Once the $5M POL debt is fully repaid (or by some future date, whichever occurs first), the Net Margin split automatically reverts to a community-agreed baseline (e.g., 5-10%). If the baseline can’t be agreed upon, a future mandatory governance vote can be triggered for it to be determined.

This gives the Core Team the immediate cash flow they need to survive, but assures the Community that it’s “loaning” its yield to save the protocol, not losing its rights forever.

Pivot to “Real Yield” (Solving Sell Pressure)

Printing LQ to pay rewards hurts the token price.

Eliminate LQ emissions as proposed (0% market incentives), but commit to restoring Programmatic Distributions in ADA, once the debt is paid.

This solves the Team’s problem (no more inflation / sell pressure) while preserving the Community’s desire for a revenue-generating asset.

Vest “Past Dues” (Solving the August Cap)

Capping the outstanding Sep-Nov rewards at August levels feels punitive, especially if actual revenue was higher due to repayments.

Calculate the actual revenue owed for these months (for transparency), but pay it out on a 6-month vesting schedule.

This acknowledges the debt the protocol actually owes its stakers (fairness) without draining the treasury of cash right now when it’s needed most for solvency.

Investor Transparency (Solving the “Sweetheart Deal” Fear)

To put the fears of a “sweetheart deal” to rest, the DAO needs visibility into the mechanics of the private sale, even if the specific identities must remain confidential. We’re effectively diluting our claim on future revenue to welcome these partners and we deserve to know the deal terms.

The Term Sheet Structure should be shared before the vote, detailing:

• Lock-Up Periods: Are these tokens fully liquid immediately, or is there a vesting schedule that ensures investors are committed to the long-term health of the protocol?
• Pricing Methodology: Is the purchase price fixed, or based on a trailing average? We need assurance that the “floor price” isn’t set significantly below market value, which would instantly devalue current holders’ equity.
• Governance Restrictions: Will these new tokens immediately have full voting power?

We don’t need names, but we need to know the capital is “patient,” aligned with our long-term success, and not just buying a discounted exit.

---

I am willing to vote YES on a proposal that secures the protocol’s future, but only if it respects the past contributions of its stakers. Let’s clean up the debt together, without permanently breaking the LQ token model.

[Hizairi]

Let’s put this to vote and get this over with.

[FlorianVolery]

@geoff Here are the terms agreed with the investor.

LQ Conversion and Vesting Mechanism
1. Conversion of USD Payment Into LQ
For every USD payment made to the Liqwid DAO:

• The USD amount is converted into LQ using the 30-day moving average price of LQ, calculated as of the payment date.
• LQ Amount = USD Payment ÷ 30-Day Average LQ Price

Once the payment is recorded, the corresponding LQ tokens are transferred to a dedicated vesting wallet. Tokens held in this wallet cannot be staked, used for governance, or receive any programmatic rewards. They remain in this wallet until the relevant vesting tranche becomes eligible for distribution.

2. Vesting Schedule

• The vesting period lasts 1 year from the payment date.
• After the 1-year cliff, the total LQ amount is released in four equal tranches.
• Each tranche is separated by 90 days.

So the distribution schedule is (Date | LQ Amount allocation per tranche):

1. 1st Tranche: “Payment Date + 1 year” (25% of LQ Amount)
2. 2nd Tranche: “Payment Date + 1 year + 90 days” (25% of LQ Amount)
3. 3rd Tranche: “Payment Date + 1 year + 180 days” (25% of LQ Amount)
4. 4th Tranche: “Payment Date + 1 year + 270 days” (25% of LQ Amount)

Each tranche releases ¼ of the total vested LQ.–

Example
Payment Date: X
USD Payment: $1,000,000
30-day Average LQ Price on Date X: $1.25
Conversion

• LQ Received = 1,000,000 ÷ 1.25 = 800,000 LQ

Vesting

• 1st Tranche (X + 1 year): 200,000 LQ
• 2nd Tranche (X + 1 year + 90 days): 200,000 LQ
• 3rd Tranche (X + 1 year + 180 days): 200,000 LQ
• 4th Tranche (X + 1 year + 270 days): 200,000 LQ