kick: (To be assigned)
title: Support Community Efforts of Improving $KARATE Liquidity
status: WIP
author: @usualape
discussions-to: https://gov.karate.com
created: 2023-08-04T09:17:29+0000
requires (optional): N/A
implementation (optional): TBD
Simple Summary
This KICK proposes participating in the Uniswap Incentive Program (Overview | Uniswap) to support the community efforts of improving $KARATE liquidity.
Abstract
To help with recent community efforts to improve the liquidity of $KARATE, this KICK proposes participation in the UniSwap Incentive Program.
Participation would entail allocating $KARATE “rewards” to specific UniSwap pools. The pools could be $KARATE/ETH, $KARATE/USDC, etc. This proposal supports $KARATE/ETH.
Through newly incentivized pools, the community will have incentive to increase $KARATE liquidity, which is needed to achieve the league’s governance, gamification, and open-IP development goals.
Motivation
To achieve the league’s governance, gamification, and open-IP development goals, there needs to be liquidity for the $KARATE token.
Currently, $KARATE liquidity is largely constricted to select centralized exchanges. Although this liquidity is important, the requirement to interact with exchanges alienates a large portion of the liquidity demand – particularly among Up Only Gaming users and the developer teams building on the league’s IP.
The alternative, a Decentralized Exchange (DEX), can offer a great improvement in liquidity by allowing open participation and incentivizing that liquidity through protocol mechanisms. One popular DEX with that provision is UniSwap.
Currently UniSwap pools don’t have enough $KARATE liquidity to service and expand existing demand.
A grant of $KARATE to the Uniswap Incentive Program can help service demand by incentivizing community members to provide $KARATE liquidity.
Specification
Overview
If approved, this KICK would authorize Sensei Foundation or its designee to set up a rewards pool for the $KARATE/ETH pair in the UniSwap Incentive Program.
This involves interacting with the UniSwap Staker V3 Contract to set the specified rewards amount and duration. The proposal is 20,500,000 $KARATE over a two-month period.
Based on feedback and overwhelming support, the proposal is updated to pre-approve a 2-month extension for the UniSwap Incentive Program and similar provision of rewards for $KARATE liquidity on Hedera through SaucerSwap, if available.
Rationale
UniSwap is amongst the most popular DEX protocols, processing up to $50B of crypto transactions a month.
The UniSwap Incentive Program offers a solution for incentivizing liquidity by rewarding community members with rewards for providing $KARATE liquidity.
Technical Specification
$KARATE rewards would be provided through “Incentive Programs” on the UniSwap Staker V3 Contract (Uniswap V3 Staker Contract | Uniswap). This involves a simple smart contract interaction at a minimal gas cost.
An Incentive Program can be set up to target the existing $KARATE/ETH pool created by the community. (Uniswap Info)
This KICK proposes ~$20k of rewards, 20,500,000 $KARATE, from the community treasury, for a two month duration. This amount, at the moment of writing, would make it the fourth largest Incentive Program on Uniswap, making it competitive and therefore providing material incentive for community participants to provide $KARATE (behind Offshift, Uniswap V3: Staker 1.0.2 | Address 0xe34139463bA50bD61336E0c446Bd8C0867c6fE65 | Etherscan).
Depending on the success of community participation, through a subsequent proposal, $KARATE holders can vote on whether to “rollover” (extend) program participation, increase or decrease $KARATE rewards, add additional liquidity pairs, or withdraw $KARATE rewards back into the treasury.
Based on feedback and overwhelming support, the proposal is updated to pre-approve a 2-month extension for the UniSwap Incentive Program and similar provision of rewards for $KARATE liquidity on Hedera through SaucerSwap, if available.
Test Cases
We will attempt the implementation on the UniSwap (and SaucerSwap if applicable) testnet before moving to mainnet in recognition of the real cost of incorrectly setting up an incentive program.
- Yes
- No
0 voters