This proposal aims at continuing efforts of the Seamless DAO to develop the Base ecosystem by providing liquidity to the recently launched decentralized exchange Infusion Protocol.
Content and Motivation
Infusion Protocol is a new AMM protocol that facilitates deep and stable liquidity on Base. It features a critical time-lock component that allows for liquidity to be utilized as an onchain primitive for other DeFi apps to build on. Similar to other AMMs, Infusion offers various pool types, including stable and volatile, catering to different liquidity needs. Stable swaps are equipped with an efficient pricing model and a liquidity curve formula reminiscent of Curve, ensuring stability in the face of market volatility.
Team: Infusion is a community-driven project with contributors and hailing from various DeFi and infrastructure projects. Core contributors have backgrounds from 1inch, Pendle Finance, Harmony, Thorchain, with advisors and part-time contributors from Uniswap and other DeFi protocols.
It went live on March 14 and in couple of days reached $300 k+ TVL and $ 1mil + of trading volume.
More importantly, Infusion is one of the first participants of the Seamless Grants programme ($50k in SEAM were allocated to the Infusion team as a grant on February 19).
Specification
The proposal suggests that the DAO continue supporting Infusion by providing liquidity directly to their platform. It is proposed to allocate $100,000 worth of SEAM tokens to supply the USDC/SEAM pool. Depending on the pool specifications at the time of allocation, necessary swaps shall be made on Infusion to fit the pool criteria.
Benefits:
Funds are not allocated to a third party; the DAO retains full control over the funds and can choose to return them to the treasury at any time.
The DAO will be eligible for a certain portion of fees generated by the Infusion Protocol.
The DAO will be eligible for an airdrop if Infusion Protocol decides to launch its own token and reward its early supporters.
Risks:
The protocol can be hacked. However, it is a traditional risk for the crypto industry.
I think this is a great idea and initiative @Ras . It shows the Seamless Community’s continued support of SCGP grant recepients. It should set a standard of how the Seamless Community / DAO can continue to work with and support other ecosystem BUIDLers on Base.
Strongly support. I believe a small amount of the treasury would need to be liquidated as well to provide the other side of the LP - in the future the DAO could seek loans for maintaining such positions as well.
Also, as the SCGP committee as already done some basic DD of Infusion team, the concept and the code, it creates a little more comfort in deploying some liquidity onto the platform despite the traditional smart contract risks identified. (Also the smaller suggested LP amount allows for less impact in a catastrophic hack or failure scenario).
If we want to support Infusion and all builders on Base I think this proposal makes sense. On the other hand we need to be careful here. If we want to move our liquidity primarily to Infusion I think that is not a good move. In that case I think we need deeper discussion about Infusion protocol and fee model. I think long term their model would not be good enough to keep everyone in harmony. When I say everyone I mean on user (the one who swaps), liquidity provider (locker) and liquidity provider (not locker) and therefore not really sustainable long term
Hey @kitanovic ! That is indeed a relevant comment. I tend to look at it in the context of a better use of the Seamless treasury/ expansion of the DAO. So Infusion is a kind of experiment for the DAO to provide liquidity (primarily SEAM token) to other protocols. If it is gonna be successful, the DAO could continue searching for good projects built on BASE to support them by providing liquidity. The choice of Infusion as the first project is based on the fact that it was examined already by the Grants committee (as Richy pointed out) and contacts with their team. Let me know if that makes sense
@Ras given the proposal has been live for almost 4 weeks without strong immediate support, what do you think about backburning this for now?
I believe this should be a priority to be revisited, but maybe after the Aerodrome POL proposal has been decided upon. If that proposal passes, it appears that setting up some infrastructure for DAO treasury management would also happen, which would help in pushing this proposal forward potentially as well, since there is a path forward to management of positions
Good point, I guess we could freeze this proposal till the Aerodrome one passes. It would also be interesting to test a SEAM liquidation into stables. Like the idea to use Aera Finance u suggested