1Hive and Bright DAO have both expressed interest in splitting DAO-owned liquidity for BRIGHT<>HNY on Honeyswap, funded from each DAO’s Common Pool. This proposal is being made in tandem with Bright DAO.
Because of the size of this proposal, we’ll use 5 separate funding proposals to add the liquidity in steps, following this process:
- 1Hive requests $100k in HNY, simultaneously Bright DAO requests $100k in BRIGHT.
- On passing, tokens will be sent to a shared 4 of 6 multisig with 3 1Hive members and 3 Bright DAO members.
- Both tokens will be added to the BRIGHT<>HNY liquidity pool on Honeyswap, and each DAO will own 50% of those LP tokens.
This process will be repeated 5 times until all liquidity has been added.
Since this process will take time, price slippage between the tokens is unavoidable. Here’s how we’ll deal with it:
- Liquidity is added 50/50 to Honeyswap at the exchange rate at that time. Tokens leftover in the multisig after that due to price appreciation can be deducted from that DAO’s next proposal. i.e. if the multisig has $10k in appreciated $BRIGHT after LP is added, Bright DAO’s next funding proposal will target $90k.
- Regardless of token appreciation or depreciation, each proposal will target $100k at the time of the proposal (rather than aiming for a hard target of $500k over the course of all 5 proposals).
- Appreciated tokens leftover after the 5th and final proposal will be used to incentivize rewards for liquidity providers for the BRIGHT<>HNY liquidity pool.
**In the event that any of the 5 funding proposals doesn’t pass within 1 month of being requested for either DAO, that funding proposal will be dropped and all leftover $BRIGHT or $HNY in the multisig will be returned to that DAO’s Common Pool. No more funding proposals will be made, however all shared liquidity for BRIGHT<>HNY at that point will be kept.
1Hive and Bright DAO have a strong connection and well-aligned interests for the future of Web3. Sharing liquidity cements this relationship in a way that is mutually beneficial for both DAOs:
- DAO-owned liquidity is a good long-term token liquidity solution vs. renting liquidity with rewards.
- Strengthens the friendship between Bright DAO and 1Hive - both communities are incentivized to act in each other’s interest.
- Shared liquidity acts as treasury diversification for both DAOs.
Expected duration or delivery date (if applicable):
Upon each proposal passing, the multisig will aim to have liquidity added to Honeyswap within a week.
Skills and previous experience in related or similar work:
@Monstrosity previously led a shared liquidity proposal with Shapeshift - we’re following that process with some improvements based on what we learned.
Amount of HNY requested: $100k WXDAI equivalent
Ethereum address where funds shall be transferred: 0x156E71f1e57D52226fc113FC4777762e98d5600e