Hey VeFam,
I am sharing a draft of a proposal aimed at enhancing liquidity across our VeChain DEXes through a structured, community-driven campaign.
I’d love to hear your thoughts and feedback on this proposal so we can improve it together.
Proposal to Add Liquidity to VeChain Ecosystem DEXes and Promote VeBetterDAO Ecosystem Growth
Proposal Summary
My name is Miguel Costa, Oily dApp owner, and an active member of the VeChain community, committed to the growth and sustainability of our ecosystem. This proposal seeks to enhance liquidity across VeChain’s Decentralized EXchanges (DEXes) through a community-driven initiative supported by matched contributions from the VeChain Foundation.
The proposal introduces a process where DEXes can propose themselves or be proposed by the community for inclusion in this liquidity initiative, subject to community voting on VeBetterDAO.
The campaign will run for an initial 12 weeks, during which time DEXes will be proposed, voted on, and reassessed every 4 weeks. Only the first DEX to reach quorum in each voting cycle will receive the allocated liquidity support.
Proposal Type
• On-chain Action
Motivation
Liquidity is crucial for a healthy ecosystem, enabling efficient trading, reducing slippage, and fostering user engagement. This proposal introduces a structured campaign where DEXes are nominated, voted on, and reevaluated every 4 weeks over a 12-week period. By ensuring that only the most voted DEX receives liquidity support in each voting cycle, we direct resources to the platforms the community deems most valuable, promoting DeFI growth within VeChain and overall strengthening of VeBetterDAO, by inspiring new use cases for B3TR, attracting more users and partnerships, and encourage the development of new applications and services.
Detailed Specification
Liquidity Addition Mechanism:
1. Community Participation:
• Community Involvement: Community members are encouraged to provide liquidity to the selected liquidity pool on VeChain’s DEX. The DEX will be chosen based on a transparent voting process conducted on VeBetterDAO, ensuring that community preferences are prioritized.
• Tracking Contributions: The amount of liquidity added by the community will be tracked on a weekly basis using decentralized and transparent systems, ensuring full accountability and visibility for all participants.
2. VeChain Matching Program:
• Matching Contributions: VeChain will match the total liquidity provided by the community on a 1:1 basis each week, with a cap of 1,000,000 B3TR per week. This cap is set based on the Foundation’s available resources and the expected level of community participation.
• Duration: The matching program will run for an initial period of 12 weeks, with voting taking place every 4 weeks to determine which DEX will receive liquidity support. Only the first DEX to reach quorum in each voting round will benefit from the matching program.
• Source of Funds: The matching funds will be sourced from the VeChain Foundation’s and VeBetterDAO existing treasuries.
• Implementation: Matching will be implemented through smart contracts that automate the distribution of matched funds to the selected DEX’s liquidity pool. The smart contracts will calculate the community-contributed liquidity each week and deploy the corresponding match from the VeChain Foundation and VeBetterDAO treasuries, ensuring transparency and efficiency.
3. Voluntary VeBetterDAO dApps Contribution:
• dApp Involvement: VeBetterDAO dApps are encouraged to voluntarily allocate up to 5% of their weekly allocation rounds to the designated liquidity pool of the winning DEX.
• Incentives for Participation: Participating dApps will receive recognition and potential incentives, such as increased visibility within the community and voting support. Contributions from dApps will be tracked and reported alongside community and Foundation contributions, reinforcing a sense of shared responsibility.
DEX Nomination, Voting, and Reassessment Process:
1. DEX Nomination (Week 1, Week 4 and Week 8):
• Open Nominations: Any DEX within the VeChain ecosystem can propose itself or be nominated by a community member to participate in the liquidity program. Nominations are submitted via VeBetterDAO, where DEXes can present their case, highlighting their importance to the ecosystem, trading volume, and potential for growth.
• First Round (Week 1): The initial nomination process will occur during the first week of the campaign.
• Second Round (Week 4): A new round of nominations will take place in Week 4, ensuring that additional DEXes have the opportunity to participate.
• Third Round (Week 8): A new and final round of nominations will take place in Week 8, ensuring that additional DEXes have the opportunity to participate.
2. Community Voting (Week 2, Week 5, Week 9):
• Voting Process: Once nominations are submitted, the community will vote on VeBetterDAO to determine which DEX will receive liquidity support.
• First Voting (Week 2): Voting will occur during the second week, and only the first DEX to achieve voting quorum will be selected to receive liquidity for the following 4 weeks (Weeks 3-6).
• Second Voting (Week 5): A new voting round will take place in Week 5 to select the DEX for the next 4-week period. Only the first DEX to achieve voting quorum will be selected to receive liquidity for the following 4 weeks (Weeks 7-10).
• Third and Last Voting (Week 9): A new voting round will take place in Week 9 to select the DEX for the next 4-week period. Only the first DEX to achieve voting quorum will be selected to receive liquidity for the following 4 weeks (Weeks 11-14).
3. Reassessment:
• Ongoing Reassessment: After each 4-week period, a new round of nominations and voting will be held to reassess the DEXes. The first DEX to achieve voting quorum in these rounds will replace the previous DEX for the next 4-week liquidity period. This process ensures that liquidity is continuously allocated to the DEX that is providing the greatest benefit to the ecosystem according to community consensus.
Tracking and Accountability System:
• Decentralized Tracking: A decentralized tracking system, implemented via smart contracts, will monitor the liquidity added by the community, the VeChain Foundation’s matching contributions, and any voluntary contributions from dApps. Weekly reports will be generated and made accessible to the community via the VeChain Explorer, VeChainStats, VeDelegate or a dedicated dashboard.
• Transparency: The system ensures transparency and accountability, allowing any community member to verify the contributions and matching process.
Goals
• Increase Liquidity: Strengthen the liquidity of VeChain ecosystem DEXes, ensuring efficient trading and reduced slippage.
• Incentivize Participation: Encourage more community members and dApps to provide liquidity, supported by matched contributions from VeChain Foundation and VeBetterDAO treasuries and voluntary participation from dApps.
• Foster a Circular Economy: Lay the foundation for a self-sustaining ecosystem where liquidity provision, dApp participation, and user engagement reinforce each other, leading to long-term growth and stability.
Addressing Potential Questions and Concerns
1. Incentives for dApps to Contribute Voluntarily:
• Increased Visibility: While dApp participation is voluntary, those that choose to contribute will benefit from increased visibility within the community, recognition in marketing efforts, and potentially higher voting and user engagement as they are seen as active supporters of the ecosystem.
2. Contingency Plans for Low dApp Participation:
• Community and Foundation Reliance: If voluntary contributions from dApps are low, the initiative will rely more heavily on community participation and Foundation matching. Regular reviews will assess the need for additional incentives or adjustments to encourage greater dApp involvement.
3. Cap on Matching Contributions:
• Sustainability: The cap on VeChain’s matching contributions, set at 1,000,000 B3TR per week, is based on a careful analysis of the Foundation’s resources and expected community engagement. This cap will be reviewed every 4 weeks in conjunction with the reassessment process, allowing adjustments to be made as needed to ensure the program’s sustainability.
4. Community Input for Selecting Liquidity Pools:
• Direct Involvement: The nomination and voting process for selecting liquidity pools ensures that the community has a direct say in where liquidity is directed. The reassessment every 4 weeks ensures this alignment remains strong throughout the 12-week campaign.
5. Transparency of the Tracking System:
• Full Transparency: The tracking system will be fully transparent, utilizing smart contracts to record and report all contributions automatically. Weekly reports will be published and accessible to the community, allowing anyone to verify the process.
6. Attract More Users, New dApps, New B3TR Utilities:
• Sustainable Growth: Beyond liquidity provision, this initiative is part of a broader strategy to create a circular economy within the VeChain ecosystem. By encouraging active participation from community members and dApps, and by ensuring that liquidity remains robust, we can foster a self-sustaining system where value is continuously created and reinvested. A stronger ecosystem means more opportunities for everyone involved. As liquidity increases, we open the door to new use cases for B3TR, attract more users and partnerships, and inspire the development of new applications and services.
7. Risks of Voluntary dApp Participation:
• Respect for Autonomy: While making dApp participation voluntary might reduce the total contributions, it also respects the autonomy of dApps and encourages genuine engagement. The success of this approach can be monitored closely, with potential adjustments made based on participation levels and ecosystem needs.
8. Success Metrics:
• Measuring Success: Success will be measured through metrics such as the total increase in liquidity, the number of unique contributors, and the impact on trading volume and user engagement. These metrics will be made publicly available through the weekly reports.
9. Sustaining Liquidity Post-Matching Program:
• Ongoing Support: After the initial 12-week matching program concludes, ongoing liquidity will be sustained through continued community and dApp participation, potentially supported by new initiatives or incentive structures that emerge from the lessons learned during the program.
10. Maintaining Community Engagement:
• Active Involvement: Community engagement will be maintained through regular updates, transparent reporting, and opportunities for feedback. The 4-week reassessment and voting cycles will keep the community actively involved in decision-making, ensuring their voices are heard throughout the campaign.
Conclusion
This proposal aims to enhance liquidity across VeChain’s DEXes while empowering the community to actively select and reassess the DEXes that will benefit from this initiative. By ensuring that only the most voted DEX receives liquidity support in each voting cycle, we can direct resources to where they will have the greatest impact, creating a sustainable and thriving VeBetterDAO. I ask for your support in voting for this proposal to help realize this vision.
I’d love to hear your thoughts and feedback on this proposal so we can improve it together.