[GIP-31/1] GEAR Strategy Cider’ed Liquidity

Greetings, gear holders. I’m but a humble holder, lurker.

I’ve been keeping an eye at you since the start. The progress is good & slow, but what isn’t slow. Slow & steady is better than fast & breaking, sorry mr salami. For those unaware, TVL is 100M+ and this google studio analytics is spectacular.

But that isn’t why I made this account. I’dlike to suggest alternative $gear launch strategy, novél.

This post-proposal is in light of the beingdiscussed $gear transferability. Mammal koala has done great work at compiling the approaches over the last few months. I argue that an alternative approach can be taken.

  • Curve Finance liquidity instead of Balancer (my praise to 0xchad thus my nickname)
  • No raise or new inflation like Gnosis auction. Instead utilize the early ideas of banteg

Seeded liquidity

The idea comes from banteg’s old contract idea

My Reward: you say!

I’ve mined some $gears, so I am interested in seeing the DAO grow & develop. But I’d not mind the DAO suggesting some reward should I carry out this task within the next 3 weeks or even sooner. You boys&girls can suggest if you feel like I should get some compensation.

FAQ; motivation; details; all inside in this Mirror article.

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Disagree, first of all, it’s not user friendly, it’s too complex, and second, it requires extra development to distract the team

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They are free to help me but idon’t need their help. They can focus on protocol.
Extra time? 2 weeks maybe, more or less. Maybe less.

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I seem to understand it, but I don’t seem to understand it’s too complicated

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  • as gears holder: you basically sell 50% to ETH. and the other 50% stays as gears inside LP. you can decide to remain in this LP and earn APY - or withdraw in full and sell remaining 50%
  • as eth holder: you buy 50% of gears that you wanted. and the other 50% stays as eth inside LP. you can decide to remain in this LP and earn APY - or withdraw & buy with remaining ETH

better?

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So the initial price of $gear will be 0.015? I don’t know how this methods find the right price of $gear.
I don’t see the huge advantage compare to gnosis auction, so why we need a change ? And this need a new contract, for me, that not safe and is too complicate.

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the initial price would need to be decided by DAO, i need to hardcore it yes

could potentially introduce an auction system into this too, but that’s too complex for me

0.015 is 150M FDV according to your docs total supply. gnosis auction would have 150-250 range anyway according to GIP31. what is the difference @frekk here?

You are complicating the issue, but you are not gaining an advantage. If you do not support it at all, you should leave.

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wowow… “you do not support it at all, you should leave” have some cider

but you are not gaining an advantage

read the lines and be polite maha123

i’ll observe comments this week and get to work if there is enough interest. so far, some weird comments and only a tweet from ivangbi. everyone seems to be concerned about dates.

you pick boys&girls, your call, i will vote once the day is near

I cannot speak to any side or support per se - I just appreciate the strategy taken from back in the days - thus my tweet about it. So far I am seeing “delay” comments & criticism, but I am not a dev… is this really 2 weeks? If so, I don’t think that is valid criticism. Think more.

If the model is better (is it?) it can even be +30 days. It has been one year, what's the point rushing with an imperfect plan (is it though?)

I am a fan of no new inflation though.
I am a fan of avoiding raise-legal risks.
I don’t want to carry those for no reason.

PS: as noted before, I am not allowed to personally vote in any token related matters.

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Sorry, I don’t drink that stuff. It seems that your proposal should be discarded.

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disagree ser ,just use gnosis-auction plz,most of dao members can not understand this strategy,so difficult

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agree ,so difficult,just use gnosis-auction

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Hey hey really appreciate you writing this up! And being willing to put in the dev effort to make it happen. It’s a holiday week in the us so just wanted to say that I’ll give proper feedback as soon as I am able. But this new option certainly offers some benefits and some drawbacks. Most notably the dao doesn’t sell any tokens.

It is novel and maybe difficult to grasp, but most of the ppl saying “too complicated gnosis auction is easier” prob also didn’t really understand or know gnosis auction existed before the current proposal explained it. I do think pairing with usdc is meh for tokens that will prob correlate to eth but rewards could counteract. Also curious what the curve V2 liquidity curve would be.

I def still have some questions around the specifics and will get those here asap.

From the perspective of my proposal, I think it makes sense to make it very clear that this proposal exists and voting no on my proposal could indicate desire to explore this path.

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Hello good sers & gearheads

It was a very well written forum post. Thanks for taking the time to make it simple, to the point + not boring.

Covers all original needs&reasonings to make token transferrable with way less liability + with greater efficiency. Setting us up for a better future.

Considering the reasons why the token is being made transferrable, Gnosis Auction really adds no marginal value, other than providing a mechanic to source new liquidity (which ends up in LP anyways) While eats away a good chunk from the supply just to do that. (+opens us up for potential legal raise risks)

For eliminating unnecessary supply expansion & potential future legal risks, i think 2 weeks is a very cheap price to pay. Lets be real, even tho we all would love to get it transferable soon, there is no momentum/trend in the marketplace that we’r missing out by moving launch window 2weeks in any direction.

I’d be for this approach

I think this is a VERY good proposal. I had spent quite a few days trying to figure out if there was a way to source the initial liquidity from current GEAR holders, but I was too smooth-brained to come up with anything like this.

TL;DR of his proposal: People who want to sell their airdropped/farmed GEAR can dump it smoothly, roughly all at the same price, without trampling each other on the way out with this mechanism. That’s not possible with a gnosis auction.

Points 2. and 4. of your “upsides” section are the ones that make this a better option imo. They’re clear, valuable advantages for price discovery.

My answers to “Questions to solve”:

  1. ETH. The simpler the better. I believe a natural correlation with ETH is beneficial. Gearbox’s ethos is very much aligned with that of Ethereum’s community in general. All stablecoins have additional counterparty risk. By building on Ethereum we’re also assuming some counterparty risk, we don’t need to compound that risk by correlating Gearbox’s liquidity with the success of Circle/Tether/Frax.

  2. The buffer is a step in the right direction. It helps incentivize liquidity to stick around, but I don’t think it’ll be enough to achieve that.

  3. Unfortunately using the DAO to seed some of the LP might be the only option to guarantee a minimum amount of permanent liquidity. It gives up a bit of the upside of the proposal, because we’d still slightly expand the circulating supply. But it ensures back-up liquidity if all GEAR bulls seed the LP with ETH to buy GEAR, and proceed to un-LP and sell the rest of their ETH to buy more GEAR (or vice-versa for GEAR bear holders), rugging all liquidity.

  4. I agree with $150M FDV. Note that most of my GEAR has a 1 year lock+1 year vesting since I participated in the DAO Round 2, at THE SAME FDV OF THIS NO-LOCK-UP proposal. Yet $150M is still what makes the most sense to me, because we guarantee $3M USD of buyers and we ensure that we avoid overpaying those who use this as a mechanism to exit their farmed/airdropped GEAR.

Suggestions to the rest of the proposal:

  • It sounds like this has non-negligible technical complexity. It requires fresh contracts. Everything that reduces its complexity should be done, e.g. Stage 3 should only happen after Stage 2, and we should use ETH instead of stablecoins, etc

  • This needs to be extensively audited. It makes no sense to rush it, nor to dismiss a better proposal because it’d take longer to code+audit. We need to make this as safe as possibly, because economically, this is objectively a better option for the DAO.

  • You should be rewarded, but X days after this has launched and survived without smartcontract failures. It just better aligns incentives for all participants.