Market Making Proposal from GSR
EconomistBeard after collecting the comments here, in a few days we will follow the process and post in the treasury proposal channel for a proper vote.
- Edited
Don_G_Lover yeah to extend on this. With regard to 'I don't want OHM on CEXs' or 'I don't want CEXs to have governance power' at the end of the day it is permissionless and there is nothing we can do. I do agree strongly with the governance power piece, but listing is in my opinion is inevitable whether we like it or not. What we can do, however, is keep things on our own terms. Having a market maker that is, at a bare minimum, aligned enough to write a forum proposal and do an AMA with the community (rare/unheard of), is valuable and a good step.
Also, a solution to the governance power issue is for CEXs to hold and trade sOHM. This way they can offer staking natively without holding tokens that wield governance power.
EconomistBeard If the answer to this is no, it's a clear example of executive decision making at the expense of informed community consensus. That would mean an immediate "no" vote from me and I would encourage my fellow OHMies to do the same.
Hello sers gsr_nyc - I am sure there will be good answers but I have a few questions below you might help with:
Is GSR committed to only dealing with exchanges and not OTC?
If OTC is available - doesn't this open up a huge attack vector for shorting?
What's to stop GSR from selling OTC and the recipient staking?
Wouldn't exchanges prefer gOHM?
Zeus But on the matter of CEXs just using sOHM, we have no means to stop them from crossing the bridge into gOHM, do we?
EconomistBeard Look above, they replied to u
EconomistBeard we do not, no
Jawesome I saw that after it posted, doing this on mobile lol
I'll hold out for review of the agreement and the AMA. Would be good to see the formal agreement prior to the AMA, though.
Zeus Then we need to actively start thinking about way we can potentially limit centralised institutions and their governance power in the DAO. Objectively, this is great for OHM but I have some genuine concerns where this can lead for our DAO.
OHM trading on centralized exchanges is pointless. There's no staking, governance, or the ability to borrow against. All this provides is another venue for people to short OHM, adding additional sell pressure compared to stakers just selling rebases.
To add, 25,000 OHM (~20mil at current prices) is excessive for market making. This amount is far more than most tokens need for the initial liquidity on exchanges.
Algar that is an interesting question, while there is no exact answer as it depends on the price action itself, it is a significant multiplier that could be much higher than 5x. A sushi AMM is not very capital efficient as you provide liquidity across all possible prices while a centralized market maker will concentrate its ressources in a band around the current price.
To summarize what I take to be the dilemma: using sOHM seems preferable to using OHM in that we don't have to rely on a CEX to provide staking services, and sOHM does not itself confer governance power. But staking the DAO's OHM will reduce APY and lead to dilution of current stakers.
Seems that we need to run the numbers to determine just how much APY would be reduced by using sOHM. We would also need to change the terms of the repayment, as the amount of sOHM would grow over the period of the loan.