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    [CIP-3] New SWTH/OSMO pool on Osmosis (ICS-20 SWTH) with SWTH reward incentives

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      galaxydefender21 last edited by galaxydefender21

      Summary

      IBC support has been enabled on Carbon with connection to Osmosis now complete. In line with the integration, Switcheo Labs is preparing to deploy ICS-20 SWTH and SWTH/OSMO pool on Osmosis.

      This proposal elaborates on the decision behind creating a new SWTH/OSMO pool, and seeks to utilize SWTH from the Switcheo Development Fund as pool incentives to bootstrap initial liquidity on the leading AMM DEX on Cosmos.

      Motivation

      Cosmos is a booming ecosystem with over $65B in liquidity across its 32 IBC-enabled chains. By connecting with IBC, Carbon will be able to unlock liquidity from these major chains which in turn drive further growth and adoption of the protocol.

      The first protocol Carbon will connect with is Osmosis, the leading AMM DEX of Cosmos with over 28 supported coins. Connecting to Osmosis is vital in creating accessibility to Carbon’s native SWTH token, which will open up the Carbon protocol to the Cosmos ecosystem.

      Description

      In order for SWTH to gain greater discoverability and awareness amongst Layer 1 ecosystems, prior proposals have been made to reserve incentives for pools that pair SWTH with native tokens. This can be seen for the SWTH/ZIL pair on ZilSwap which has since seen robust liquidity and trading volume in large due to the attractive APR for the pool.

      We propose applying the same SWTH reward system for the coming SWTH/OSMO pool by utilizing SWTH from the Switcheo Development Fund as liquidity rewards.

      With approximately 48.5M SWTH (~$652,000 at the time of writing) unused in the SDF, we propose allocating a small portion of SWTH to the SWTH/OSMO pool as incentives to encourage initial liquidity and drive user interest in the new pool.

      The proposed details for utilizing the SDF funds are as follows:

      • Allocate 6M SWTH (~$80,000 at the time of writing) from the Switcheo Development Fund for liquidity incentives
      • Rewards will be distributed over 70 days which provides an attractive APR of ~83% (at approx $500K liquidity) to draw users to the pool and encourage sustained liquidity. We foresee trading volume and liquidity to have reached a sufficient level by 70 days to stop the SWTH incentives
      • Once the pool has been created, the Switcheo Labs team will submit a signalling proposal to Osmosis governance for the SWTH rewards to be matched with OSMO

      View APR calculation: 
      https://docs.google.com/spreadsheets/d/1ByDFyHteF_W7sGgLhjDOfjOhOh3_YdvmBozDUMEDFSk/edit?usp=sharing

      With Osmosis’ existing incentive matching programme, SWTH rewards will be matched with equivalent OSMO rewards to liquidity providers under the condition that the signalling proposal to match rewards is passed by the Osmosis community. This proposal will be submitted by the Switcheo Labs team upon creation of the SWTH/OSMO pool.

      Benefits

      • Greater SWTH token discoverability and accessibility
        Listing SWTH on Osmosis creates a new trading venue for SWTH amongst a new user base which will help to drive trading volume and overall SWTH liquidity. SWTH being listed on the top AMM DEX of Cosmos will also help to drive greater awareness and visibility for the token, and draw more users to Carbon.

      • Matched OSMO rewards
        The incentive matching programme by Osmosis not only increases the amount of rewards that SWTH/OSMO liquidity providers earn, but also halves the cost of drawing in liquidity to the pool.

      • Cement Carbon’s position as a mainstay in the Cosmos ecosystem
        Carbon’s mainnet launch outlined by the Stargate upgrade and IBC support has garnered significant attention from the Cosmos community. We believe this opportunity should be leveraged by swiftly adding the SWTH/OSMO pool to Osmosis to sustain interest and drive adoption from the new Cosmos audience that has been attracted.

      Timeline and Future Plans

      This proposal will first be put up as a forum post to invite open discussion with the community. If the majority of the community is agreeable, we will submit the Community Pool Spend proposal for voting on 23 Feb 2022.

      Upon creation of the pool, the Switcheo Labs team will then submit a signalling proposal on Osmosis requesting matched OSMO incentives. For more information about Osmosis’ incentive matching programme, click here.

      Once the Cosmos community has become more acquainted with SWTH and the Carbon protocol, the Switcheo Labs team will turn its focus on listing new Cosmos pairs on Demex for cross-chain trading.

      This proposal is initiated by the Switcheo Labs team.

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        nwo last edited by

        Thank you for the initiative.

        Any reason to choose SWTH/OSMO pair over SWTH/ATOM? Would it also be possible to also add SWTH/ATOM listing on Osmosis or it is either?

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          SannPaa last edited by SannPaa

          SWTH/OSMO pool funded by SDF: I agree with the proposal. One of the main goal is to create awareness within the Cosmos Ecosystem, and I believe this will help us. Yes, bootstrap, and allocate some of the SDF, since this proposal fits within the purpose of the SDF. And it is well enough funded.

          I also believe this is the beginning, a first step, of a journey. Besides the proposal, I would like to see a OSMO/stable pairing on Demex, and I prefer OSMO/BUSD. And I agree with @nwo, an ATOM pairing. Im thinking arbitrage opportunities (volume).

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            galaxydefender21 @nwo last edited by

            @nwo One reason is that OSMO pools receive an allocation for higher matched OSMO rewards compared to non-OSMO pools. You can view the proposal about it here: https://www.mintscan.io/osmosis/proposals/128

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              nwo @galaxydefender21 last edited by

              @galaxydefender21 SWTH/OSMO is definitely good. But I hope a direct SWTH/ATOM pair could also be added in near future. If not on Osmosis, then some other dex.

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                BigDog @galaxydefender21 last edited by

                100% agree, it's the best way to integrate into the cosmos ecosystem and make sure we have a smooth welcome to the club.

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                  swappi last edited by

                  ,,This proposal will first be put up as a forum post to invite open discussion with the community. If the majority of the community is agreeable, we will submit the Community Pool Spend proposal for voting on 23 Feb 2022.''

                  and what about this spend proposal? did we dismiss it? 2 days are now over

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                    swappi last edited by

                    ,,This proposal will first be put up as a forum post to invite open discussion with the community. If the majority of the community is agreeable, we will submit the Community Pool Spend proposal for voting on 23 Feb 2022.''

                    and what about this spend proposal? did we dismiss it? 2 days are now over

                    1 Reply Last reply Reply Quote 0
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