[DRAFT PROPOSAL] Token swap between Neutron, MantaDAO and Kujira, for Protocol Owned Liquidity

Summary

This is a joint proposal prepared by representatives of the Neutron Foundation and MantaDAO (also representing the Kujira Community). To facilitate this token swap, the representatives will form the 3/4 Nemaku Multisig DAO on Neutron as follows:

  • Multisig address: Nemaku Multisig

  • Signers:

  • Pragmatic Monkey (Kuji & Manta) (25%)
    neutron1cyglcvuqt5nzvlst6ehhgquhz0c7nzcsxhlzlz

  • Mike Richards (Kuji & Manta) (25%)
    neutron14udyajpzkveqx5tsz8qghrx8qh9gmrh7cez4cm

  • soi2studio (Neutron) (25%)
    neutron17s76s29nyuu5p6xaqz0sndw3sgl78hy4gqm342

  • Luisqa (Neutron) (25%)
    neutron1ze09kc5ackut7wc4pf38lysu45kfz3msr98nru

Nemaku Multisig proposes two separate deals as part of a comprehensive plan to build sustainable liquidity for KUJI and MNTA on Neutron, and NTRN on Kujira:

  1. A $150k NTRN<>MNTA token swap & Protocol Owned Liquidity:

Neutron Main Dao Treasury exchanges $150k of NTRN for $150K MNTA with MantaDAO.

Neutron matches the $150k MNTA received with a further $150k NTRN (Total $300k requested) and provides $300k MNTA/NTRN LP tokens as Protocol Owned Liquidity on Astroport (The liquidity hub for Neutron).

MantaDAO matches the $150k NTRN received with a further $150k MNTA (Total $300k requested) and provides $300k NTRN/MNTA LP tokens as Protocol Owned Liquidity on BOW (the AMM built on top of FIN, Kujira’s orderbook DEX).

  1. A $150k NTRN<>KUJI token swap & Protocol Owned Liquidity:

Neutron Main Dao Treasury exchanges $150k of NTRN for $150K KUJI with the Kujira Community Fund.

Neutron matches the $150k KUJI received with a further $150k NTRN (Total $300k requested) and provides $300k KUJI/NTRN LP tokens as Protocol Owned Liquidity on Astroport.

Kujira matches the $150k NTRN received with a further $150k KUJI (Total $300k requested) and provides $300k NTRN/KUJI* LP tokens as Protocol Owned Liquidity on BOW.

*(TBD: Kujira Community may opt to use the new levered LP feature and pair their NTRN with USK stablecoin instead of KUJI).

This will result in the following new liquidity distribution across the Neutron, MantaDAO Kujira ecosystems.

Owner Tokens Provided Tokens Received
Neutron Main DAO $600k NTRN $300k MNTA/NTRN LP and
$300k KUJI/NTRN LP on Astroport
MantaDAO $300k MNTA $300k NTRN/MNTA LP on BOW
Kujira Community Fund $300k KUJI $300k NTRN/KUJI or
$300k NTRN/USK on BOW

These tokens swaps and subsequent provision of Protocol Owned Liquidity (POL) will:

  • Sustainably deepen liquidity for NTRN, MNTA and KUJI across the ecosystems.
  • Improving trade execution on Bow and Astroport without the expense of incentivising liquidity.
  • Diversifying treasuries across premier cosmos assets.
  • Open up additional arbitrage routes between Astroport and FIN, resulting in a net increase in trading volumes on both sides.
  • Build a bridge between the Neutron and Manta/Kujira communities, promoting net positive-sum cooperation across the Cosmos.

Further detail and Timeline

Subject to community support, the proposed execution timeline is as follows:

  • 7 day Forum period for community discussion
  • Neutron places proposal on chain to provide $600k Liquidity to the Nemaku MultiSig
  • Manta and KUJI make formal proposals timed to finish not later than end of the Neutron voting period of 14 days.
  • Nemaku Multisig convenes on receipt of tokens to enact the will of the community i.e. distribute tokens to team multisigs to be provided as POL.
  • The entire process is estimated to take 3 weeks to complete following community approval.
  • Token swap exchange ratio will be on a 10-day TWAP, based on Coingecko Price Data, to be updated Monday 19th February 2024 10am UTC, prior to the Neutron on-chain proposal going live.
  • The above proposals require approval from three distinct sets of voters. Should either the Manta or Kujira communities not approve of the proposal it shall not impede the progress of the other proposal.
  • Due to price volatility during the voting period a 10% volatility buffer will be applied to the tokens going to each team’s ops wallet to be matched with the tokens received from the swap. Unmatched funds left over at the end of the token swaps will be returned to the respective DAO.

Execution Process

After addressing any questions or concerns from the community, and being approved by governance, the token swap deal and LP provisioning process will be as follows:

  1. A $150k NTRN<>MNTA token swap & Protocol Owned Liquidity:

MantaDAO sends $150k of MNTA (to be send to the Nemaku MultiSig), and a further $150k MNTA + 10% volatility buffer (to be paired with NTRN) to the MantaDAO operational address kujira14udyajpzkveqx5tsz8qghrx8qh9gmrh7dwf00k. Once in the operational wallet, the team will IBC-transfer the $150k of MNTA to the Nemaku MultiSig on Neutron (IBC transfers cannot be performed directly from a CW3 multisig).

Neutron Main DAO Treasury sends $150k of NTRN to the Nemaku MultiSig, and a further $150k NTRN + 10% volatility buffer to the Neutron DAO Ops Multisig neutron1fnvpa9fn0p23pp0ytsdwyfzyyh4p0vw496lnukyy8ryamhfzmarqpay7u3.

Nemaku Multisig passes a proposal to send $150k MNTA to the Neutron DAO Ops multisig neutron1fnvpa9fn0p23pp0ytsdwyfzyyh4p0vw496lnukyy8ryamhfzmarqpay7u3, and $150k NTRN to the MantaDAO operational address kujira14udyajpzkveqx5tsz8qghrx8qh9gmrh7dwf00k.

Neutron will pair the received $150k MNTA and $150k NTRN in TBC and provide $300k liquidity in the MNTA/NTRN LP on Astroport.

MantaDAO will pair the received $150k NTRN and $150k MNTA in kujira14udyajpzkveqx5tsz8qghrx8qh9gmrh7dwf00k and provide $300k liquidity in the NTRN/MNTA LP on BOW.

  1. A $150k NTRN<>KUJI token swap and Protocol Owned Liquidity:

Kujira Community Fund sends $150k of KUJI (to be send to the Nemaku MultiSig), and a further $150k KUJI + 10% volatility buffer (to be paired with NTRN) to the Kujira team’s operational address kujira1zspr6va4ev78lpsh48s57nv6szxj4cdywt2kkg. Once in the operational wallet, the team will IBC-transfer the $150k of KUJI to the Nemaku MultiSig on Neutron.

Neutron Main DAO Treasury sends $150k of NTRN to the Nemaku MultiSig, and a further $150k NTRN + 10% volatility buffer to the Neutron DAO Ops Multisig neutron1fnvpa9fn0p23pp0ytsdwyfzyyh4p0vw496lnukyy8ryamhfzmarqpay7u3.

Nemaku Multisig passes a proposal to send $150k KUJI to the Neutron DAO Ops Multisig neutron1fnvpa9fn0p23pp0ytsdwyfzyyh4p0vw496lnukyy8ryamhfzmarqpay7u3, and $150k NTRN to the Kujira team’s operational address kujira1zspr6va4ev78lpsh48s57nv6szxj4cdywt2kkg.

Neutron will pair the received $150k KUJI and $150k NTRN IN neutron1fnvpa9fn0p23pp0ytsdwyfzyyh4p0vw496lnukyy8ryamhfzmarqpay7u3 and provide $300k liquidity in the KUJI/NTRN LP on Astroport.

Kujira will pair the received $150k NTRN and $150k KUJI in kujira1zspr6va4ev78lpsh48s57nv6szxj4cdywt2kkg and provide $300k liquidity in the NTRN/KUJI LP on BOW.

About Manta DAO

MantaDAO is a decentralized autonomous organization based on the Kujira blockchain and governed by the MNTA token. The DAO and its token are backed by Protocol-Owned Liquidity (POL) and revenue-generating products, one of which is MantaSwap, a multihop router built on top of FIN, Kujira’s CLOB DEX. MantaDAO’s mission is to support the entire Kujira ecosystem towards delivering a best-in-class experience to both traders and protocols looking to list their token on FIN, while being profitable for MNTA stakers. To achieve that, MantaDAO operates two complementary activities: (i) a Development arm building applications and tooling to improve users’ experiences and opportunities across the Kujira ecosystem, and (ii) a Market Making arm focusing on deepening liquidity on FIN’s orderbook via long-term protocol-owned liquidity and sustainable market making programs (i.e. not requiring token incentives). Since launch in April 2023, the DAO has accumulated ~$6.1m (as of 07-Feb-24) of POL spread across 33 MNTA LPs (incl. KUJI, wBTC, wETH, wstETH, ATOM and many more). During the month of January 2024, MantaDAO generated $29.8k of net trading profits from market-making activities (~6.1% implied trading APR) and another ~$10.3k of revenue from Manta Swap fees. The utility of the MNTA token is primarily to protect the MantaDAO treasury from governance attacks. MantaDAO stores POL in the form of LP tokens inside the DAO treasury. POL is constantly being increased and extended to new assets in order to boost the trading volumes and fees from MantaSwap router, which works on top of FIN and BOW. Each staked MNTA token represents a share in MantaDAO and enables stakers to receive regular distributions from operational income (MantaSwap revenue at present, more revenue generating products will be developed in the future). Since Kujira on-chain governance proposal 450 passed, MantaDAO is able to independently create new pools and trading pairs in BOW and FIN, and, most importantly, flexibly configure existing ones. Thus, MantaDAO truly owns its liquidity at the code level. A long-form introduction on MantaDAO can be found here and our latest monthly report outlining the state of MantaDAO’s finances is available here.

Website | Twitter | Telegram

3 Likes

I’m in support of this proposal. I think it’s not a big investment based on both community pools. I do think NTRN liquidity on Kujira comes with the perk of listing NTRN as collateral to mint USK. USK is my preferred choice for a decentralized stablecoin and to use it within Cosmos. It’s all personal but I like to have at least 25% of my crypto USDC to be decentralized. So, for me this is yes because it increases the likeability that NTRN becomes an asset to mint USK

3 Likes

In support of this proposal :saluting_face:

2 Likes