Welcome to the AmpleSense DAO Community Hub Forums Official AmpleSense Progress Proposals APP-001 – Asset to be paired with kMPL in the Apollo kGeyser

  • APP-001 – Asset to be paired with kMPL in the Apollo kGeyser

  • davoice321

    Administrator
    November 13, 2020 at 20:58

    APP Status: Voting Complete; Community Selected kMPL/AMPL pairing for Apollo kGeyser

    Important Links

    APP Summary

    The Apollo kGeyser is an important liquidity initiative for the DAO. The community will vote on which token (ETH, AMPL or USDC) will be paired with kMPL in the Apollo kGeyser.

    Overview

    kMPL (KiloAmple) is a multi-purpose asset developed by the AmpleSense DAO (similar in some respects to YFI) that will:

    • Help fuel DAO operations
    • Fund products, services and initiatives that will grow the Ampleforth and broader elastic finance ecosystem (EeFi)
    • Enable holders to shape the direction and priorities of the DAO via governance
    • Provide a range of benefits to kMPL holders, including the ability to earn token rewards from DAO-supported projects (such as lending, elastic vaults and other initiatives)

    The purpose of this APP is to provide the community with the opportunity to vote on which crypto asset will be paired with kMPL in the upcoming Apollo kGeyser liquidity program. A signaling vote on the initial Idea Incubator proposal (100 community members participated) indicates the community prefers the following potential Apollo pairs:

    • kMPL/ETH
    • kMPL/AMPL
    • kMPL/USDC

    Rationale

    kMPL liquidity is important as it will enable the DAO to leverage the asset to drive the development of products and services featuring Ample, including a planned new lending platform that the community will be asked to consider soon.

    Given that the community will be fueling kMPL liquidity, it is important that considerations regarding impermanent loss and stability of principal be considered. The community had the opportunity to review a wider basket of assets, but ultimately preferences aligned around three (ETH, AMPL and USDC) that have different risk and benefit profiles.

    Idea Incubator Discussion

    In the Idea Incubator discussion related to this APP, the following points were made about each of the assets the community will vote on. (We are not commenting on these arguments for or against certain assets.)

    Ample

    • Pro: “I believe Pairing kMPL/AMPL will result in less volatility and result in less impermanent loss, especially going into a bull market and not knowing what to expect with the kMPL price.”
    • Con: “In my view ETH is going to have greater correlation to kMPL. AMPL, being soft-pegged to the dollar, is going to stay around that range, but kMPL isn’t, so it will likely somewhat follow ETH. Plus, I personally don’t like the idea of diluting my AMPL holdings into another pool.”

    ETH

    • Con: “Assets like ETH can have huge price swings making it impossible to recover from Impermanent loss while with AMPL the elasticity allows for price swings that over time will correct to its peg of $1.”
    • Pro: “I realize kMPL/AMPL may be a front-runner in the polling, but one major thing to consider will be the challenge over at Uniswap that has yet to be addressed for any pairs not tied directly to the primary 6 tokens (WETH, DAI, USDC, USDT, COMP, MKR). Ultimately, trading routes back to those 6 and there are “vampire” arbitrageurs out there draining value from pools based on this trade routing. I would hate to see Uniswap’s AMPL/kMPL pair drain away value from this project!”

    USDC

    • Con: “If kMPL is $1 and it goes up in value 100% and it was paired with AMPL at $1 then to minimize the IL one would have to wait for AMPL to reach $2 to negate the IL. If paired with USDC you would not be able to recover because it is $1 and always will be $1.”

    Implementation and Deliverables

    After the vote, the DAO will:

    • Create a small liquidity pool (using 3-4 kMPL from the DAO Treasury) on Uniswap pairing the winning asset to kMPL; the initial kMPL price will be $100 USD per kMPL
    • Note: Liquidity tokens purchased by the DAO will not be used to mine kMPL
    • Launch the Apollo kGeyser

      The community has asked questions about how kMPL will flow from the Zeus kGeyser to Apollo kGeyser.

      • The Zeus kGeyser has a much higher reward increase rate and multiplier (i.e., the Zeus kMPL reward multiplier increases from 1x to 5x over a 14 day period), than Apollo
      • Although individuals depositing kMPL liquidity into the kGeyser will lose their Zeus reward multiplier, they will benefit from earning from two kGeysers at the same time, while their bonus multiplier increases in both kGeysers (the maximum Apollo kGeyser reward multiplier is 3x, and the program will last 120 days)
      • We expect liquidity to increase over a few weeks as kMPL is earned from the Zeus kGeyser and deposited into the Apollo kGeyser

      Contributors

      The DAO leadership team will implement the Apollo kGeyser.

      Budget Request

      • 3 – 4 kMPL from the DAO Treasury to fund the Apollo kGeyser
      • DAO leadership will fund the initial liquidity pool from personal funds (which will be reimbursed by the DAO in the future).

      Timeline

      • APP-001 Vote: November 14 – 17
      • Apollo kGeyser Launch: November 17/18
      • This discussion was modified 5 months, 3 weeks ago by  davoice321.
      • This discussion was modified 5 months, 3 weeks ago by  davoice321.
      • This discussion was modified 5 months, 3 weeks ago by  davoice321.
      • This discussion was modified 4 months, 1 week ago by  davoice321.

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