I propose that the Astar treasury make an additional ASTR deposit into the HydraDX Omnipool to further increase on-chain liquidity. I propose adding 5.54M ASTR ($718k) which is 1.5% of the treasury. This would bring the ASTR treasury deposit in the Omnipool up to $1M or 0.1% of FDV.
The Astar treasury in June 2023 deposited 2,222,231 ASTR into the Omnipool, currently valued at $282,111. https://forum.astar.network/t/listing-astr-in-hydradx-omnipool-seeding-initial-liquidity
Astar sibling acct on HydraDX: 7LCt6dFnHxYDyomeCEC8nsnBUEC6omC6y7SZQk4ESzDpiDYo
As you can see, the Astar treasury deposit into the Omnipool has maintained its value over time. However, with that liquidity you can only trade 40k ASTR ($5,174) per trade before hitting 2% slippage. Recently in a twitter discussion an investment firm mentioned they tried to buy 600k ASTR but slippage was too high and they had to use a CEX instead.
DCA helps you break up large trades, but this reinforces the fact that we should continue to deepen our liquidity across the Polkadot ecosystem. Letâs bring those fees on-chain to Polkadot!
Another reason to increase ASTR liquidity on-chain is to support larger ASTR money markets. HydraDX and Bifrost are currently launching lending platforms. While neither has committed to an ASTR market yet, increasing substrate Omnipool liquidity would support a larger max cap for lending markets, again enabling another use case for the ASTR token. Once ASTR lending markets launch, I would also encourage the ASTR treasury to deposit ASTR liquidity ($200k?) to enable larger borrowing positions. (a deposit into lending markets would be a separate future Astar forum proposal)
The great thing about all of the proposals above is that they put to use âTreasury Owned Liquidityâ
- earn fees
- add token use cases
- deepen liquidity
- no âlisting feeâ or reoccurring costs for market making or LM
- tokens arenât âspentâ and are still controlled by the Astar community.
But how much in fees?
Today the Omnipool shows trading volume of $46k and earning 4.3% on ASTR deposits. HydraDX Omnipool stats page
Deposits into lending would likely earn 4-10% once they are borrowed.
Final notes:
- This will have a side-effect of increasing the market capitalization of ASTR by $718k because tokens in the treasury acct arenât counted towards MC but tokens in a DEX are.
- Disclosure: I am an $HDX token holder. I am not an HDX team member.
- Interlay treasury has already deposited $750k of INTR and weâre discussing even more. As I outline in this thread, Iâd encourage all teams to deposit $1M of liquidity.