Since Ref finance has now token over Burrow and been added to the Burrow DAO council, I guess here is the right place to submit this proposal
It is very difficult right now for anyone to build a decent position in the Burrow Token ($BRRR), the largest liquidity pool is the BRRR ↔ NEAR pool on Ref where there is $15k worth of liquidity, the next biggest pool is on Trisolaris and is half this size.
There is a severe lack of liquidity for $BRRR and it is the token of the largest lending platform on Near, I think it is important this is addressed ASAP before interest in the Near ecosystem starts to ramp up significantly. Also, I have seen there are plans for Burrow to buyback the BRRR token, I don’t know how it will manage this with the low liquidity.
I propose we add $100k worth of liquidity to the BRRR ↔ USDC.e (or USDC) pool on Ref, funded by the Burrow treasury
The Burrow treasury holds $250k worth of $BRRR (at current price) and $1.6m USDC.e among other assets so adding $100k worth of liquidity represents only 5% of the treasury (half of this % being in the protocol’s own token) and LP’ing the token will help the token holder base to grow and will also generate income in LP fees for Burrow.
100% supportive of your proposal, with the latest announcement there is a fair chance of onboarding new users. The liquidity is way too low to let new players enter.
I’ve also been following BRRR closely and making suggestions to the new team on ways to revamp platform and tokenomics.
There are several things to be taken into account:
Adding more liquidity also means that it would take much larger volume to move price.
Being a liquidity provider also carries the risk of Impermanent Loss.
There are additional ways to incentivise liquidity such as adding additional rewards.
So IF money were to be allocated from Treasury, it should be allocated once the price has reached what can be deemed as ‘fair market value’. Otherwise we would be contributing towards holding the price artificially down AND incurring significant impermanent loss. This is particularly bad if we are using USDC from protocol reserves.
I propose increasing both REF and BRRR rewards on the current pool, see how much we can grow liquidity organically from community and enabling people to earn some BRRR.
Afterwards, I would propose creating a REF/BRRR pair, given that we have plenty of both assets and REF has deep liquidity on the REF/NEAR pair. The exact amount of liquidity TBD.
Regarding your aspects, i have a few comments:
to 1. This is correct but the current 50K liquidity is far from reasonable looking at the marketcap, basically you’re leaving out any reasonable sized traders or investors. On the other side brrrr gets very vulnerable to big price fluctuations which looks not good and not sustainable
Correct, but users have the same risk of IL and i guess that’s something the treasury can financially accept.
The rewards have to be high enough to actually draw LP’s in otherwise it’s not going anywhere.
When talking numbers then i believe we should see at least 10-15%. So a liquidity of 200K-300K makes sense.
Appreciate all your proposal/response! I agree with most of the points discussed above. Also, yes, indeed liquidity is >300k now
On behalf of the Ref team, we have also noticed the lack of overall BRRR liquidity and have since developed a plan:
The TLDR takeaway: - Traders: Expect lower slippage and significantly more liquidity. - LPs: Anticipate substantial incentives incoming to subsidize IL. - Whales: Please contact us (start a ticket on Discord or join the Telegram group Telegram: Contact @ref_finance ) so we can collaborate and assist you in acquire /offloading and strategizing for a long-term positioning of BRRR.
BRRR Liquidity Injection Plan (3 steps):
Deploy 100k in the NEAR<>BRRR LP pool:
a. Withdraw 50k (in USD) of NEAR from Ref’s treasury.
b. Withdraw 50k (in USD) of BRRR from Burrow’s treasury.
c. Provide a total of 100k (in USD) to the NEAR<>BRRR pool.
Deploy 100k of BRRR in the form of a sell limit order on the NEAR <> BRRR pool:
a. 100k (in USD) of BRRR will come from the Burrow treasury. Assuming the price is at $0.004, we propose to allocate 25M $BRRR tokens.
b. Divide the 100k (in USD) into 10 chunks. More details can be found on the actual proposal I put up.
Add incentives to the BRRR <> NEAR pool with $REF as a farming incentive:
a. We are targeting a projected TVL of >700k (in USD) with an estimated incentive reward of up to 75% APR in the farming pool for one month. The exact details/structure of the incentive will be further discussed internally.
