One sided token supply - matched with HNY

🌱 Ideas
#1

Hey all,

I’m just wondering how hard it would be to setup a system where users could supply a token (which could be approved by the community on a list) and have it matched with HNY in the liquidity pool. The intent of this would be to minimise the mainnet fees associated with bridging a token over and effectively double the liquidity… It should only have a positive impact on the HNY price because there would be an incentive to use HNY as the other token in a pair.

Example: I want to bring stakedao tokens over to xdai and put them into a liquidity pool. I bridge my SDT over the omni bridge (paying the mainnet fees) and then supply them to honeyswap to be matched with HNY. At this point the new HNY is minted and 1hive essentially has an investment in the pair. It does create more HNY, but in most instances I would imagine the user would continue to provide liquidity, so it would not create a sell pressure on HNY.

It does create the problem of 1hive owning a bunch of alt coins, but we could maybe have them setup as an index fund style investment for members to buy? This is why having the community create the list of eligible tokens would be good.

Once a pool has enough liquidity it would not be eligible, because the user can just swap half their tokens for HNY before supplying to the LP without major slippage. It would mainly incentivise users to bring new tokens across the bridge and provide liquidity to honeyswap.

3 Likes
#2

Just to explain a bit more, currently I would need to sell half my tokens for eth/dai/hny on the mainnet (this means trading fees), then bridge the two tokens over (double fees here) and supply both sides of liquidity (half the overall liquidity for the community minus all the mainnet fees).

#3

I think its more along the lines of zapper? Correct me if I’m wrong @blackbus - but something like this?

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The only difference is the amount of ETH put in would be matched by newly HNY and you would only own 1/2 of the LP value?

1 Like
#4

Yes exactly. HNY would be the other token and could come from a pool setup by 1hive specifically for this purpose.

You would essentially be providing X amount of token A and receiving LP tokens of A-HNY.

If you remove them you get 0.5X amount of token A and Y amount of HNY

#5

This seems to be an interesting idea. My thoughts as a newbie as I am yet to grasp an understanding of yield farming, liquidity pooling and other AMM concepts:

  1. So the tokens that we would like to bridge to xDAI - what is their use case. e.g. SDT? On the main net SDT is the governance token, providing liquidity is subsidised to counter IL, the protocol fee is shared by the staked token. But on the xDAI chain my assumption is that there is no support or use case for the token? So what is the point of bringing the main net tokens to xDAI?
  2. It seems to me that we need more liquidity on the AMM but this liquidity has to be able to earn yield - i.e there needs to be a demand for borrowing, lending etc so that the token gains a velocity and each of these actions can then be taxed to generate fee based on demand.
  3. I was thinking of why xDAI/ Honeyswap - and for now as a newbie my main reason is low fee, fast tx but i assume this is at the cost of a compromise in security as I assume the xDAI chain is less secure / decentralised compared to the main ETH chain.
  4. Also thinking about what protocols like Badger did to bring big liquidity to the ETH main chain, was wondering could something similar be done on Honeyswap/ xDAI to pull such value to xDAI?

I guess these are some non-coherent thoughts… but would like more discussion and comment!

#6

I used stakedao as an example as there is currently no liquidity on honeyswap and it is a defi project. What I’m talking about is bringing more liquidity onto honeyswap by making it more economically viable for members to bridge a token over.

If we can reduce the barriers to entry then we can increase liquidity on honeyswap and this makes it more attractive to new users, leading to a positive feedback loop.

Currently you need to be a whale to bridge tokens over from the mainnet and provide liquidity and most whales aren’t as concerned about high trading fees on mainnet.

I know people are working on other prkjects within 1hive to bring liquidity over, I just thought this concept could be implemented easily and would personally use it.