Transfer Hydration Omnipool LPs from Astar Treasury to AFC for Active Management

Governance Astar Finance Committee
1

Summary

This proposal aims to transfer the management of Astar Treasury’s liquidity positions in the Hydration Omnipool, currently held via the Astar Sibling Sovereign Account on Hydration to the Astar Financial Committee (AFC). This transition will enable more active and strategic utilization of these positions as part of the AFC initiative.

Background

In 2023 & 2024, the Astar Treasury seeded a total of approximately 7.5M ASTR into the Hydration Omnipool across two LP positions:

  • Position ID #2011
  • Position ID #9151

These LPs were funded and deployed via the Astar Sibling Sovereign Account on Hydration:

At the time of deployment, Astar’s onchain governance had not yet launched. As a result, the Sudo key was used for the LP transfers.

Since then, the LPs have remained idle and are currently not earning incentives or yield. The Treasury has also experienced an estimated impermanent loss of ~150,000 ASTR across both positions.

With onchain governance now fully live, the community can reassign control of these assets through a public referendum.

Related Forum Discussions:

Motivation

  • Idle Capital: The current positions are not generating yield or adding strategic value.
  • Active Treasury Management: AFC can actively rebalance, claim incentives, or withdraw and redeploy capital based on market conditions.
  • Treasury Diversification: AFC can use the liquidity to gradually build non-ASTR reserves on Hydration as part of the AFC mission.

Proposal

We propose
initiating a public referendum on Astar Network to execute the following actions via XCM to Hydration:

Step 1: Withdraw LP Positions from Hydration Omnipool

Withdraw both LP positions using xcm.transact to call omnipool.withdraw_liquidity on Hydration.

Withdraw 2,280,715 ASTR from Position ID #2011

Calldata:

0x3b03db07000000000000000000000000000000004c450bf2d1cef5e2010000000000

Withdraw 5,290,824 ASTR from Position ID #9151

Calldata:

0x3b03bf230000000000000000000000000000000020200dedcc246060040000000000

Example Astar → Hydration Calldata:

0x330003010200c91f01007369626cd60700000000000000000000000000000000000000000000000000000314000400000000070010a5d4e81300000000070010a5d4e80006000700e40b5402821a0600883b03db0700000000000000000000000000000000f8e556cb71747800000000000000140d0100000101007369626cd6070000000000000000000000000000000000000000000000000000

Step 2: Transfer Withdrawn ASTR to AFC Multisig on Hydration

After withdrawal, transfer the full ASTR balance to the AFC multisig account on Hydra using xtokens.transfer.

Example Calldata (actual amount will be based on the balance after step 1):

0x4d00b622b8b173b6016c7fcf66a9f392e2518313b09afb2a809fa1a69f9b6154f3a6090000004e21ce01

Replace the destination public key with the AFC multisig address and adjust the token amount (~7.57M ASTR).

Step 3: AFC Re-deposits ASTR into Hydration

Once received, the AFC will manage and re-deploy the assets through its multisig account in line with market opportunities and governance strategy.

Addresses for Reference

Onchain & Historical Records

LP Deployment via Sudo:

XCM Messages:

Hydration Event Logs:

Governance Alignment

This proposal represents the continuation of Astar’s transition from Sudo-driven operations to full onchain governance. The LPs in question were initially deployed at a time when community-led governance was not yet in place. Now, with governance fully activated, any change to their management requires a transparent referendum, ensuring the community has oversight of Treasury activity.

This action also falls within the scope of the Astar Financial Committee’s mandate. The AFC is responsible for the active management of Astar Treasury assets and is empowered to implement strategies that support value creation, reserve diversification, and responsible liquidity deployment across ecosystems.

Next Steps

  1. Gather community feedback and adjust the proposal as needed.
  2. Submit this proposal on-chain as a public referendum.
  3. Upon approval, execute the XCM instructions from Astar to HydraDX.
  4. AFC assumes full management of the assets and reports periodically on strategy and outcomes.

Call to Action

We encourage all Astar stakeholders and community members to review this proposal, ask questions, and share feedback. This is an important step toward more strategic, decentralized, and dynamic treasury management. Once consensus is reached, the Main Council will move forward with submission of the onchain referendum

Gaius_sama, Astar Main Council :astr:

6 Likes
2

Absolutely agree with this fund transfer as a way to optimize part of the treasury on Hidration. This is exactly the kind of strategic move that, with the AFC in place, makes perfect sense to start implementing in order to actively manage ASTR funds and generate sustainable revenue.

I believe it’s a crucial step because, as mentioned above, if treasury funds are left unmanaged or handled passively—without an active financial management body like the AFC—we not only miss out on optimization opportunities but also risk potential losses (such as impermanent loss, as pointed out in this post)

Fully in favor of this move, and happy to see the AFC gradually taking a more active role in managing funds that were previously underutilized.
Let’s keep moving forward!

PS: What’s great is that with the upcoming reports the AFC will publish about the performance of these fund management strategies, it will become much easier for community members to verify and understand how treasury funds are being used.
I believe this is a strong step forward toward clear and accessible transparency.

3

I fully support this proposal.
Previously, I provided ASTR liquidity to Hydration based on earlier discussions, but transferring that responsibility to the AFC is the right move.

An upcoming monthly report will show that the AFC is already managing ASTR and its derivatives across multiple DeFi protocols, earning yield in various tokens. It’s clear that ASTR liquidity is best managed by the AFC going forward.

Additionally—though slightly off-topic—I’m genuinely excited about the use of XCM in on-chain governance.
This is exactly the kind of innovation I was hoping to see within the Polkadot ecosystem.

4

Thank you @Gaius_sama for the initiative!

As a member of the Astar Financial Committee, I support this initiative.

The proposed transfer of Hydration Omnipool LP positions from the Astar Treasury to AFC aligns directly with our mission to actively manage Astar’s onchain assets in a transparent and value-accretive manner. Via AFC management, we will try to ensure these LPs can be strategically rebalanced, repositioned, or used to diversify Astar’s treasury reserves based on market conditions.

The AFC multisig on HydraDX is operational:

7MiNKDACtQN5NnYdntv7vHB6B3GXP3eCWtWRSBSmSRk3Z3u3

Once the referendum is approved and the ASTR tokens are transferred, AFC will ensure the assets are redeployed efficiently and periodically report back to the community with strategy updates and performance outcomes.

We appreciate the community’s feedback and look forward to supporting this proposal’s successful execution.

1 Like
5

Fully support this—makes sense to move idle funds under AFC for more active and transparent management. Looking forward to seeing the treasury put to better use.

6

This is a great proposal — really glad to see another step toward moving away from Sudo-driven actions and into full on-chain governance.

:white_check_mark: What’s positive:

It empowers the AFC to actively manage treasury assets and make smarter, faster decisions based on market conditions.

It fixes an inefficient situation where large LP positions were just sitting idle and even incurring losses (~150k ASTR in IL).

It opens up the opportunity for treasury diversification, which is crucial for long-term sustainability.

It reinforces the AFC’s role as a key pillar in Astar’s financial strategy.

:warning: A small watch-out:
Handling large amounts of funds always comes with responsibility. Even with a multisig in place, it’s important to maintain transparency throughout the process — from withdrawal to redeployment — and keep the community informed.

That said, I fully support this move. The AFC should have the autonomy to efficiently manage the funds allocated under its mandate and work toward maximizing Astar’s treasury for the benefit of the entire ecosystem.