Algorand Foundation's allocation of liquidity into liquidity pools

Governance
1

Hi,

I try to fine tune my proposal, so can you kindly read this and give feedback, please.

"

Proposal

Algorand is technologically very sophisticated and technically superior compared to other major chains. However, Algorand main issue is not technology, rather poor liquidity across ecosystem. This proposal is how Algorand Foundation can support Algorand ecosystem to grow with reasonable low risk by offering liquidity into liquidity pools without giving away its asset.

Goals

Improve liquidity in liquidity pools in core tokens without huge risks.

Bring EUR stablecoin into Algorand ecosystem.

Rationale

One of the biggest difficulties Algorand is facing at the moment is poor liquidity in almost across the board. Algorand Foundation can allocate its assets into major/core tokens in Algorand ecosystem via liquidity pools. This will not waste or lose AF assets, rather allocating them for some period of time. This requires assets to be allocated into low volatility assets like stablecoins or ALGO itself.

I propose that, AF will allocate liquidity into following LP pairs with following amounts (in millions of dollars):

1mm$ into Tinyman ALGO-USDC, 2mm$ into Pact ALGO-USDC, 2,5mm$ Tinyman USDC-USDT, 0,5mm$ Pact USDC-goUSD, 1mm$ Tinyman USDC-goUSD, 2mm$ Tinyman USDC-EURS, 2mm$ Pact USDC-EURS, 2mm$ Tinyman ALGO-EURS, 2mm$ Pact ALGO-EURS.

So 15mm$ in total. (Notice new EURS token in here. Will be explained later.)

By allocating some of AF funds into these liquidity pools it is not away from AF treasury, because AF is able to withdraw their assets any given time if needed. But I propose that AF will keep these assets in these liquidity pools until each of the pools will meet threshold of 5m$ (excluding AF assets). Only exception is situation where stablecoin starts to de-peg or AF urgently needs its funds in somewhere else.

This will lead into more efficient use of AF treasury by supporting the ecosystem at the same time with relatively low risk due to nature of stablecoins.

New EUR stablecoin EURS

Stasis Euro (EURS) is new token in Algorand ecosystem. They seem to have 10k€ worth of tokens already in Algorand, so this shouldn’t be huge project to inject more liquidity from that end. It can be other Eur stablecoin, but this seems to be almost in place already.

Why Eur stablecoin?

Eur stablecoin in Algorand ecosystem will benefit all the Europeans using Algorand. Narrative has always circulated around USD stablecoins for reason or another, but recent SEC related events has led industry into situation where people are starting to look also other options. So, time might be right to introduce Eur stablecoin in Algorand ecosystem and take into account 344 million native Eur users. This will pave the path to wider Algorand blockchain adoption especially in Europe.

matters to be decided:

  • Is AF willing to help ecosystem with liquidity issue?
  • Is 15 million dollars suitable amount to be injected into liquidity pools?
  • Is AF willing to help to bring Eur stablecoin into Algorand ecosystem?
  • Are the LP pairs fairly distributed and are the pairs most relevant ones from ecosystem point of view?
  • How long will assets to be held in liquidity pools?

"

1 Like
2

Hi, I absolutely agree that we need also EUR stable coin, however I believe that we need more stablecoins, not just EUR and USD stable coins…

Thats why i brought to GHH3 project https://stabilitas.finance

I would like to see also CHF stable coins, CZK stable coins, INR stable coins and more…

I want to see the eshops accepting the stablecoins as form of payments… This is the only way for generic addoption.

We need to create new onramp and offramp solutions for general people to get stable coins, and i believe the only right way is the regulated way… The EU legislation already creates form of payment processing company which is under supervision of the central banks and can issue electronic money… We do not need the users to get the stable coins or algorand through the non regulated exchanges… We should be compliant with regulations.

3

Hi @scholtz

I agree. In my proposal the main theme is to tackle liquidity issue and gently bring EUR stablecoin into the ecosystem. If this proposal goes thru, I think, then it is easier to suggest also other currencies. I do not want to take too big bite at once. that is the reason I haven’t included other currencies in this proposal.

4

Hi,

I didn’t received so much feedback as I hoped, so I will keep my proposal almost in its original form. So here is my Algorand Foundation’s allocation of liquidity into liquidity pools proposal:

Proposal

Algorand is technologically very sophisticated and technically superior compared to other major chains. However, Algorand main issue is not technology, rather poor liquidity across ecosystem. This proposal is how Algorand Foundation can support Algorand ecosystem to grow with reasonable low risk by offering liquidity into liquidity pools without giving away its asset.

Goals

Improve liquidity in liquidity pools in core tokens without huge risks.

Bring EUR stablecoin into Algorand ecosystem.

Rationale

One of the biggest difficulties Algorand is facing at the moment is poor liquidity in almost across the board. Algorand Foundation can allocate its assets into major/core tokens in Algorand ecosystem via liquidity pools. This will not waste or lose AF assets, rather allocating them for some period of time. This requires assets to be allocated into low volatility assets like stablecoins or ALGO itself.

I propose that, AF will allocate liquidity into following LP pairs with following amounts (in millions of dollars):

1mm$ into Tinyman ALGO-USDC, 2mm$ into Pact ALGO-USDC, 2,5mm$ Tinyman USDC-USDT, 0,5mm$ Pact USDC-goUSD, 1mm$ Tinyman USDC-goUSD, 2mm$ Tinyman USDC-EURS, 2mm$ Pact USDC-EURS, 2mm$ Tinyman ALGO-EURS, 2mm$ Pact ALGO-EURS.

So 15mm$ in total. (Notice new EURS token in here. Will be explained later.)

By allocating some of AF funds into these liquidity pools it is not away from AF treasury, because AF is able to withdraw their assets any given time if needed. But I propose that AF will keep these assets in these liquidity pools until each of the pools will meet threshold of 5m$ (excluding AF assets). Only exception is situation where stablecoin starts to de-peg or AF urgently needs its funds in somewhere else.

This will lead into more efficient use of AF treasury by supporting the ecosystem at the same time with relatively low risk due to nature of stablecoins.

This action will also increase Algorand ecosystem TVL, which will be beneficial for the ecosystem.

New EUR stablecoin EURS

Stasis Euro (EURS) is new token in Algorand ecosystem. They seem to have 10k€ worth of tokens already in Algorand, so this shouldn’t be huge project to inject more liquidity from that end. It can be other Eur stablecoin, but this seems to be almost in place already.

Why Eur stablecoin?

Eur stablecoin in Algorand ecosystem will benefit all the Europeans using Algorand. Narrative has always circulated around USD stablecoins for reason or another, but recent SEC related events has led industry into situation where people are starting to look also other options. So, time might be right to introduce Eur stablecoin in Algorand ecosystem and take into account 344 million native Eur users. This will pave the path to wider Algorand blockchain adoption especially in Europe.

matters to be decided:

  • Is AF willing to help ecosystem with liquidity issue?
  • Is 15 million dollars suitable amount to be injected into liquidity pools?
  • Is AF willing to help to bring Eur stablecoin into Algorand ecosystem?
  • Are the LP pairs fairly distributed and are the pairs most relevant ones from ecosystem point of view?
  • How long will assets to be held in liquidity pools?
5

Hi, is EURS in production?

I cannot find any mainnet AMM which is either Algo/EURS or USDC/EURS

6

They have 10k test batch in place so not far from production.

https://algoexplorer.io/asset/227855942

7

Good, i have started the project Stabilitas… to bring not only EUR, but also other stablecoins such as CHF, GBP, CNY or INR to Algorand… https://stabilitas.finance/

Currently in the PoC stage, working on the MVP…

1 Like
8

NIce! I hope these stablecoins will see light as soon as possible. These kind of projects are what we need the most.