IIP-28

IMPLEMENTED

Simple Summary

The DAO will remove 100% of the current Treasury ILV/ETH liquidity position from Sushiswap. The ETH component of this liquidity position will be swapped for USDC to provide additional runway for development.

Abstract

Following the BLBP sale, the Treasury provided liquidity into the Sushi Liquidity Pool to increase liquidity for the ILV/ETH token pair. The total position is currently worth $5.44M USD. This liquidity is no longer required, as SLP staking adoption has thrived, and the ILV/ETH liquidity pool is extremely deep on Sushiswap. This proposal seeks to utilize the Ethereum component of this liquidity position to be swapped for USDC to ensure runway stability for the DAO.

• https://debank.com/profile/0x58c37a622cdf8ace54d8b25c58223f61d0d738aa

Motivation

As a component of overall risk management strategy, this proposal seeks to increase the Treasury’s stablecoin holdings by utilizing a currently unnecessary liquidity position.

Ensuring runway stability for the DAO is critical as we approach the launch of Illuvium. The sale of the Ethereum component of this liquidity position will raise funds in USDC, while not impacting the ILV token price. It remains critical to ensure we have sufficient stablecoin funds available for payments, increased marketing presence and partnerships as we approach the launch of Illuvium.

The sale of the Ethereum component of the Treasury’s ILV/ETH liquidity position will provide USDC runway to cover approximately 2.2 months of game development and operations.

The removal of the Treasury SLP liquidity position will not affect staking APR.

Specification

The DAO will remove 100% of the Treasury ILV/ETH Liquidity Position, swapping the ETH component for USDC. The ILV component shall be added to the Treasury’s ILV balance.

Identified Downsides

It’s been identified that liquidity levels could drop in the future as the APR in Illuvium’s staking pools decreases. The council and community have identified many potential solutions and alternatives to support long term liquidity or make long term liquidity unnecessary on the scale of vault buybacks. This is not a short term concern, and there are many potential solutions should this become an issue.

Test Cases

N/A.