As a result of the last voting, the community of Graviton approved a proposal called Pathway that stipulates the usage of its treasury assets for market making of the governance token GTON, in accordance with the parameters and expectations that seem realistic for the majority of token holders. Following this governance decision, the team began deeper research into the implementation of Pathway for Graviton.
At the moment, we envision a four-phase introduction of Pathway:
- Semi-automated approach (Stage 0)
- Automated approach based on a centralized backend (Stage 1)
- Automated through smart contracts (Stage 2)
- Automated through smart contracts and fully calibrated by the proposed algorithm (Stage 3)
Stages 0–2 are based on a so-called Lower Boundary logic. Prior to collecting enough data on the dynamics of the fundamental metrics of the project and the behavior of users and traders, it is difficult to estimate what the upper boundary should be, meaning that the market making team can only make decisions by apply ad-hoc heuristics which can be worked out via consulting with multisig members, advisors, ambassadors and the community of GTON holders in its entirety.
The implementation of Stage 0 involves optimizing a growth function and its parameters that most holders will see as an optimal goal for the current year.
It should be noted that the treasury resources are limited, and there is no risk-free profit. Accepting this specific proposal, we (token holders), as a DAO, acknowledge the risk of eventual funds’ shortage in the treasury. However, the team, community, ambassadors and project advisors are determined to do everything in their power to execute the plan to the letter, including its financial, market making, business and product development subgoals. Moreover, this experiment can always be halted if it doesn’t demonstrate favorable results.
This article describes the core part of the proposal, including the preparation as well as the three options submitted for voting and discussion.
Two months ago, $1.5 mln was withdrawn from the Treasury to be used for market making of GTON in four blockchain networks: Ethereum, Fantom, BSC, and Polygon. Several markets with GTON were established, and today’s market overview is presented on the picture below. The data is being constantly updated, but as you can see, the basic liquidity is concentrated in stablecoin pairs, whereas the pairs to native tokens have lost value due to the recent market crash, which has also influenced the price of GTON.
In addition, there is a single-sided DODODEX pool with $1,569,261 in liquidity.
The basic premise of Pathway is to run Stage 0 without using the treasury funds, simply taking advantage of the exclusively available AMM liquidity.
The plan is as follows:
1 — withdraw liquidity from DODO (withdraw 80%)
2 — withdraw liquidity from Uniswap v3 (withdraw 50%)
3 — withdraw liquidity from PancakeSwap (withdraw 50%)
Since DODO and Uniswap v3 pools are asymmetric, it will yield about 500k USDC for the launch of Pathway Stage 0.
After an in-depth research, the Uniswap v3 model seems to be unusable for the purposes of farming and market-making automation, so the remaining 40–50% from Uniswap will be transferred to a Sushiswap pool (some liquidity will remain for arbitrage purposes and possible additional integrations).
Also, a part (30%) of Fantom liquidity will be migrated to Polygon.
With this configuration, we will launch semi-automated market making on Pancakeswap (GTON/BUSD) and Sushiswap (GTON/USDC) pools on BSC and Ethereum, respectively.
To simplify the implementation as much as possible and ensure a quick launch of the production-ready release, it is suggested to start the system with only a lower boundary for GTON, that is, to only stabilize the price of the token when it falls below the planned trajectory. Currently, it is proposed to maintain an average daily increase of 1% in the project capitalization.
The 1% target is calculated based on research of the projects that are deemed successful in DeFi in several categories: oracles, AMM, crosschain tech.
However, sustaining this target growth is possible only if, along with the growth of capitalization, the fundamental parameters of the project will also expand, such as the number of users, holders, integrations and partnerships. By itself, the use of treasury without product development and marketing will result in high risks of wasting the treasury without any organic growth. Therefore, our primary focus is on organic exponential growth of all the fundamental parameters of the project listed above and beyond.
We submit three options for community voting. Two of them signify that the proposal is accepted fully with all the described parameters and the Reject option means that the proposal and its parameters need to be revised after further discussion within the community and resubmitted with new parameters.
Option 1 — Everyday Buy Back (EBB): at a random time (to prevent frontrunning arbitrage and manipulation) of the day, a treasury buyback will occur so as to bring the price to the target price. If the price is higher than the target, then it is inactivated and postponed until the next day.
Option 2 — Irregular Weekly Buy Back (IWBB): on a random day, three times a week, at a random time of the day, a treasury buyback will occur so as to bring the price to the target price. If the price is higher than the target, then the procedure is inactivated and postponed until the next epoch.
Option 3 — Reject: not accepting the proposal (return to discussions, research and redesigning).
It is worth noting that there are differences between these options, as each has its pros and cons.
The advantages of EBB: the price correction occurs daily, which will result in a smoother dynamics when averaging. Also, this process is easier to analyze and interpret.
IWBB is a little more complex and can lead to greater volatility. However, in this scenario, the risk of manipulation by arbitrage bots or frontrunners is minimized. The project team is leaning towards the IWBB option, however we will accept the option for which the largest number of GTON votes were cast.