Providing Liquidity for LAY

Shiden Network (Kusama) Proposal
38

Thank you @you425 for asking us for the clarifications.

Also, please let me (and our team) express our appreciation for all discussions, including those by @anon24836865 and @moonme.

Especially, @anon24836865, our team and I are full of gratitude for all the posts you have done across forums and Discord. Please let me try to answer your questions in your latest post.

Before we jump into the “Providing Liquidity for LAY” discussion, please let me clarify the purpose of this proposal once again.

As @nancheng wrote here, the Starlay core team believes that developing Starlay and sustaining the price of LAY contributes to and leads to activating the Astar ecosystem.

To achieve these, we believe the following three things are essential.

  1. Try to be with the community once again.
  2. Not stopping the development of LAY
  3. Stabilize the LAY price

In this proposal, we attempted to put all the necessary measures to achieve the above things. And for No.3, we considered adding $1M worth of liquidity would be effective.

Now, back to the discussion of the proposal in this forum thread.

To provide $1M worth of liquidity to stabilize the LAY price, we proposed two options:

  1. Starlay Finance will borrow ASTR from Astar Treasury for a period of 12 months; after 12 months, we will again decide in the forum whether to withdraw liquidity or leave liquidity. The interest rate will be 1.0% per year, and we will pay Astar Treasury in LAY. All rewards earned by providing liquidity will be used to buy back LAY.
  2. Starlay Finance lends LAY to Astar Treasury for any period. Astar’s vote would determine interest rates and terms. The Astar community can vote on using the liquidity rewards and everything else, except that $1M of liquidity will be provided.

I see @you425’s point about conducting option No.1 above. So let me elaborate.

  1. The amount of past fundraising through Incubation Program, etc. (excluding IDO)

$1M as seed round

  1. Investment income from Starlay (interest income and liquidation income)

$0 (the revenue will be distributed to ve voters)

  1. Past expenditures and future plans for fund management.

About $4M in two years:

  • Ongoing Audits: $0.5 - 1M
  • Future Audits: $0.5 - 1M
  • Developers / Core Team / Community Managers and other Supporters: $1 - 1.5M per year

As some people have mentioned, yes, our team received $2M in the first IDO and second token sale. However, for the amount of $0.75M we received at the time of the first IDO in ASTR (which is now worth $0.25M), we decided to use all ASTR we received in the first IDO to buy back LAY.

So to do option No.1, we need to ask for funds from Astar Treasury.

But to be honest, what I am really proposing is option No.2.

If Starlay Finance lends LAY to Astar Treasury and Astar provides $1M liquidity to the pool, Astar Treasury will acquire a liquidity fee. And anything other than that $1M in liquidity, the Astar community can vote on what to do with it.

We believe this second option would not only help to stabilize the price of LAY but also help the Astar community to expand the ecosystem. In addition, the community vote would determine interest rates too.

We are very appreciative to receive positive feedback on option No.2 from @sota and @Maarten. If possible, I would be grateful if I could ask @sota and @Maarten for your thoughts on option No.2 once again.

By the way, discussions on Starlay Finance have been continuing for nine days. And there are more than 228 have been made.

Thank you again to all participants who have spent time on these discussions. Let’s move forward together.

Neo

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