Thank you for your reply, @neo_defi
Thanks for your concern. As you might know, protocols such as Curve try to distribute revenue to users from the treasury as much as possible. At the same time, those protocols try to increase the value of the native asset (token) to continue development. Our team is aiming to manage the protocol almost in the same way.
I understand that you will strive to increase the value of the token allocation for the team. Remember, however, that this could be viewed as a way to eliminate the incentive to sustain the project if all the LAY for the team is sold.
Currently, we’re planning to allocate the amount to be borrowed from shares of remained IDO (4.5%) and Community Growth. We’ve already assigned 5.5% of IDO in the first IDO and second token sale. By the way, the fund for No.1 in this proposal will be allocated from Team’s share.
Okay, thank you very much.
Yes, agree with you. While there is a chance for Astar treasury to earn liquidity fees, there is also a risk. Considering the amount of Astar currently circulates, yes, have the same understanding with you that it won’t be a big issue for the ASTR price even if some proportions of ASTR in the pool dilute due to the price changes of LAY.
Yes, I agree. But even if the risk is low, as long as we are going to use Astar’s public property, we need to explain the risk to the community. There was no mention of this in the proposal, which is why I did it.
Along with the risk, I hope we can discuss the possibility of how to use earned liquidity fees for Astar treasury and the ecosystem. Willing to participate in those discussions if requested.
Frankly, I think it is a bit difficult to take advantage of in this regard. For example, the following are the benefits of providing liquidity:
1.Swap Fee ($LAY & $ASTR)
2.Farming Rewards ($ARSW)
Selling what Astar got is not good for dApp(ArthSwap & Starlay). Even if it is not sold, it could be seen as unfair to invest in some DeFi because it provides liquidity.
Basically, I think the conclusion would be to save the token. However, I am positive that the community will discuss it and invest it somewhere. There seems to be no problem to think about this at a later date since it is less urgent. It’s only a side effect.
Now, regarding this proposal, if the Astar community decides that there is no problem, it would be good. However, as it stands, I am not very positive about it.
As Sota posted above, the following needs to be presented:
- Why should Astar help increase $LAY liquidity?
- What are the benefits to the Astar ecosystem?
- How long is it necessary to support liquidity provision? (There is a need to be able to maintain some of the above benefits even after the liquidity support ends.)
Without a specific reason to offer liquidity to Starlay, it would not be fair not to accept the proposal if other protocols wanted the same thing. Of course, that is not realistic. There needs to be a determining factor for the community to make a fair decision.
*Portfolio diversification does not make much sense in this case, as there are few dApp tokens other than stablecoins that are more stable than the L1 reserve currency.