DAO treasuries, as liquidity-providers, have predictable and strong hands. Two DAOs partnering to provide liquidity is particularly powerful. This is where two DAOs compose some kind of agreement about exchanging and providing liquidity. Gnosis & DxDAO is an example of one of these D2D joint liquidity partnerships
PrimDAO is building tooling and infrastructure to make some of these strategies easier and more robust to employ you can read more here
I would love to hear from 1hive on any further ideas or perspectives around this proposal and I’d like to thank @Kyle_Stargarden for helping draft this concept!
1Hive and Shapeshift execute a community swap for $250,000 equivalence of FOX and HNY tokens. The treasury balance sheets at that time don’t really change, other than in the amount of risk they each carry. Each community is now carrying some of the risk of the other community’s asset volatility. In other words, both communities now are rationally incentivized to act in the other community’s interest, because they both own a stake in the other. Each community has also hedged their own risk, by transferring some of that risk to the counter party community. This act marries the two communities together.
Each DAO is now holding $250,000 of the other’s token. The DAOs can execute a “joint venture” for liquidity. Each DAO can provision liquidity in equal portions. 1Hive provides $250,000 FOX and $250,000 HNY and Shapeshift does the same thing. Now we have $1 million in liquidity for the HNY/FOX pair, and the DAOs only exchanged $250,000 in value. None of this capital has been given away for liquidity rewards to internal and external participants. We’ve also tied the communities tighter together, and created technical mobility. 1Hive bees and cunning Shapeshift Foxes can now easily mobilize financial and human capital between the two networks.
Outside of DAO2DAO partnerships there’s been some other tremendous successes with protocol-owned liquidity like with OlympusDAO as well.
I’d like to open up the discussion here and I would love to hear from 1hive ideas or perspectives around this proposal!
Why token swap with Shapeshift?
I believe shapeshift and 1hive cultures are aligned. ShapeShift DAO aims to be the best self-custodial multi-chain community owned interface. They have an established brand over 7 years, experience/track record shipping/executing on products and a large amount of reach in crypto including through connected influencers like Erik Voorhees. By aligning HNY with FOX we will align the economic and community incentives of both DAOs to work together, including making it more likely to get HNY related products integrated directly into Shapeshift which will help bring our mission to the world and benefit both DAOs in a positive sum manner.
Shapeshift community has expressed interest in working with 1hive and trialling honeyswap on xdai for the FOX token. Shapeshift has been looking for a payment channel with $1-2M in liquidity to swap in and out of the FOX token as well as an on/off ramp solution. Recently Shapeshift has added close to $160k in fox-xdai liquidity to test the protocol. 1hive initial efforts to support Shapeshift was through a $500k-$1M liquidity minining effort using the farms but upon further discussion farming isn’t always the best use of capital and often results in sell pressure. With some members from the tulip swarm and shapeshift, the teams have pivoted to using this as a great opportunity to trial a D2D partnership. This is an opportunity to utilize capital in an efficient manner while aligning the two communiies.
- Liquidity Mining for FOX
- Liquidity Mining on Honeyswap discussion
- Liquidity Minning on Honeyswap proposal
- $250,000 (~877 HNY)
- $100k (~350 HNY)
- keep it simple exchange 950 fox/hny