[Proposal] Use Treasury-owned USDC to support RAFT liquidity

Governance Proposals
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Next week, the RAFT token will launch on the market and the liquidity on decentralized exchanges will play a pivotal role in ensuring a prompt and robust adoption of the token. The upcoming RAFT / R 80:20 Balancer pool will be the cornerstone of the ve8020 RAFT token design.

We have also observed that the Uni v3 TEMP / USDC pool has an excess liquidity compared to the actual needs and such excess liquidity reduces the efficiency of the price discovery. TEMP currently has almost $ 2.5 mln TVL combined across Uniswap v3 and Balancer. More than 40% of the circulating supply is deposited to decentralized exchanges as protocol owned liquidity, which is several magnitudes higher than other similar tokens.

Such a surplus of liquidity dampens the efficiency of price discovery. Moreover, Tempus owns a significant share of the liquidity in the pool and a high concentration of liquidity providers is not a desirable feature of a well-functioning token as TEMP aspires to be.

Objective

We want to ensure an adequate level of initial liquidity for the RAFT / R 80:20 Balancer pool.

Action required

We propose to remove $ 200k worth of USDC from the TEMP / USDC Uniswap v3 pool and allocate such proceeds to seed the RAFT / R 80:20 Balancer pool to be made available on trading when RAFT launches next week.

Benefits and Call to Action

The funding of the upcoming RAFT / R pool will enhance the ability to finance future expansions and integrations that could benefit Raft the most. Seeding the pool with protocol-owned funds provides a stable layer of liquidity on which other liquidity providers could build upon.

Furthermore, the reduction in the TEMP circulating supply will increase the efficiency of the price discovery mechanism and prepare the ground for the TEMP Staking Program.

We anticipate that the forthcoming TEMP Staking Program will increase TEMP’s trading volume. This increase is predicted to indirectly motivate a diverse range of market participants to acquire TEMP and provide liquidity to capture both trading fees and TEMP price appreciation. By doing that, the reduction in liquidity we are proposing will be partially or totally offset by the market with the additional benefit of widening the number of liquidity providers, without need for further intervention on our side.

Timeline

A discussion period will take place until 3:00 pm UTC on Thursday 5 October, followed by a three-day Snapshot vote immediately after.

Your engagement in this decision is critical. We invite you to discuss, share your insights, concerns, and preferences in the comments below.

2 Likes
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how do you propose removing nearly 1/3 of the USDC in the Uni v3 pool without instantly cratering the TEMP price?

do you plan to also remove the corresponding amount of TEMP?

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I would not be in favour of this. Similar to Zilayo, I believe this would result in a large and detrimental impact on $TEMP.

As a tokenholder, this would not make sense. Additionally, for the wider project, $TEMP is the flagship, and shouldn’t be weakened to boost secondary projects (regardless of how much I support them). I believe other avenues should be explored to boost RAFT liquidity that does not impact $TEMP, or consider ways in which to ensure $TEMP holders are not impacted (e.g. incentives to offset against any losses caused (not an attractive option, hence me favouring sourcing liquidity elsewhere).

1 Like
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Both USDC and TEMP would be removed from the pool at the same time, so this would have no impact on the TEMP price at all.

The corresponding TEMP is returned to Treasury so it’s removed from the circulating supply.

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Having some ample DEX liquidity for RAFT is paramount in my opinion to support the launch and support price discovery for RAFT. This will be accompanied by CEX listing for RAFT but both are needed to make it a success.

Since TEMP holders directly benefit from the success of RAFT via TEMP staking, I can acknowledge your point but I think there is a mutual benefit here.

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Hi Garai, thanks for the post. A 25k trade currently pushes the Temp price 3.5% (not insubstantial). Also Temp price has moved up over 100% and down over 50% in the last 6 months, so I don’t believe current liquidity is limiting price discovery at all. Raft has also have various investing rounds, using some funds from this for protocol owned liquidity seems like a more sensible option so I am against this proposal.

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In fact the price of Tempus has dropped 10% in the last 12 hours, so I don’t think price discovery is an issue.

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Raft does not have an investment rounds and it was developed using Tempus team funds.

In fact to me it makes sense to use funds held by Tempus DAO since Raft was developed for the benefit of TEMP holders and Tempus Labs has already subsidized $500k+ in incentives for the benefit of Raft.

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I understand it could certainly make sense. But given Raft did not raise any funds this 45% total allocation between team and advisors and investors seems high. Now you can get some of that from temp holding * 0.6 of original investors and team, but even if that explains just the 19.16% that implies they hold a total of 320million raft which seems very high. And that doesnt even start to explain the 25.91% for investors.

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1 Like
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Hi there. I support this proposal because Raft’s success is Temp’s success.

If Raft doesn’t succeed, this liquidity elimination will hit Temp harder, but I believe Raft’s success.

Out of the question, Now the price of Temp is sad.
Temp supports Raft, so I hope Temp Holder will benefit more…

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I don’t agree.I will vote against it.

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Squeeze out temp’s value and throw it away ruthlessly?

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I don’t agree, TEMP holders have suffered too much. And I want to point out that the treasury TEMP was not burned until they were sent to the burning address. The bug bounty is paying TEMP tokens from the treasury, isn’t it? The team raised 34m in the fundraising, 200k is a very small number compared to it.

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Voting is now live on Snapshot!

All TEMP holders are requested to vote here:

https://snapshot.org/#/tempusgov.eth/proposal/0x0e4a6faf16cc79e4ea6838b48d42b0791ac5f2d231b0f88489f5dc4966be7918