Hi,
I wanted to start conversation how Algorand App Community Treasury can be used more efficiently and how it can also support FOLKS token launch, FOLKS token performance & liquidity while helping platform’s security, now when FOLKS token is almost here (Maybe good to get plan out before launch to get more clarity how platform will help the token to perform better in the long-run).
You have mentioned in “$FOLKS TGE Liquidity provision plan” post, you will take $1.5M from community treasury leaving about $500k in there, this will not touch about that in any way.
First we have to define things we want to achieve. I think these are most obvious things:
- Grow treasury funds to cover potential losses in case of hack or bad debt.
- Support FOLKS token long-term price performance and liquidity.
- Help platform to grow and make platform more secure.
Bonus: Help Algorand ecosystem to grow if interest are aligned.
One way to put funds in use and achieve all points above is if we use liquidity pools as tool to store funds in treasury. My suggestion is following:
Treasury will allocate 50% of funds into pools against USDC and other 50% against FOLKS monthly basis.
For example, if treasury earns say for sake of an example 100k ALGO a month, it will allocate 50k ALGO into ALGO/USDC LP and 50k ALGO into ALGO/FOLKS LP.
or if platform earns 4 goETH a month, 2 goETH will be added into goETH/USDC LP and 2 goETH into FOLKS/goETH LP.
This way we, achieve small buy pressure for FOLKS token and we will increase FOLKS’s liquidity onto ecosystem, but we will also help deepen ALGO’s, goETH’s etc liquidity against stable asset (USDC), so platform can increase collateral limits over time and liquidators can liquidate assets more efficiently.
(Earned USDC will be added 50/50 against ALGO and FOLKS, instead of 50/50 against USDC and FOLKS)
I suggest funds will be added into Pact and Tinyman somewhat evenly to minimize related platform risks.
For example in following way:
USDC into Tinyman ALGO/USDC & FOLKS/USDC
ALGO into Pact ALGO/USDC & FOLKS/ALGO
goBTC into Tinyman USDC/goBTC & FOLKS/goBTC
wBTC into Pact USDC/wBTC & FOLKS/wBTC
etc….
if we compare this strategy against, what we wanted to achieve we get:
- Grow treasury funds to cover potential losses in case of hack or bad debt. –> LP tokens will be held in the treasury and are partly against stable assets (USDC)
- Support FOLKS token long-term price performance and liquidity. –> We will add more liquidity against FOLKS monthly basis and also increase FOLKS value when more assets are added one-sided against it (technically can be first swapped and then added proportionally, but this is semantics).
- Help platform to grow and make platform more secure. –> In the long-run this will help platform to grow when it has better chance to increase limits and make liquidations more safe while growing reserves.
Bonus: Help Algorand ecosystem to grow if if interest are aligned. –> helps to tackle Algorand ecosystem liquidity issues.
Good to notice that this way we are not giving funds from the treasury, so we can later withdraw funds from liquidity pools if needed.
Other treasury assets like V2 and deprecated assets:
V2 tokens in treasury: I propose that we leave them be, because they will deepen platform liquidity over time and are in active use. also their value is not that much.
Deprecated assets: I propose, we will swap deprecated assets like EURS to FOLKS monthly basis, because those funds have no actual use.
Best regards,
ROAM