How do Liquifrens work?
Who can participate?
Anybody aligned with the value and mission of Liquity is welcome to partake: providing a public good in a credible neutral way that is open to all users - trustless, transparent, permissionless, and unstoppable.
What initiatives are eligible?
Anything the community perceives as beneficial to the Liquity ecosystem. Here are some suggestions for inspiration, but please do feel free to think outside the box if it helps realize the three goals mentioned below:
A — Increase the awareness of Liquity and borrowing volume
- Present Liquity in newsletters, events, spaces, etc.
- Target specific user groups (Latam, Asia, Islamic Finance, …)
- Create docs, education, and support in different languages
B — Increase utility of LUSD and LQTY
- Grow LUSD & LQTY integrations with relevant DeFi protocols
- FIAT on/off ramp and card integrations
- Provide analytics, monitoring, and accounting tools
C — Grow liquidity for LUSD and LQTY
- Any initiatives to maximize LUSD liquidity availability, such as growing LUSD x*y=k liquidity on DEXes (such as Balancer LUSD/wETH/LQTY pool or LUSD/ETH pools)
- Improve LUSD/LQTY liquidity on DEXs. (stable and non-stable pools like e.g. LUSD/ETH)
- LUSD/LQTY listing on CEXs
- New use cases for LUSD/LQTY LPs, such as e.g. GearBox enabling LUSD/3CRV LP to leverage their position.
Additional Information
This program will run for a test period of 3 months, after which Liquity AG will decide if and in which way to continue with it. The Liquity AG treasury will not vote and leave the decisions to LQTY holders.
To be receivable (and able to be included in the funding vote), LiquiFrens proposals:
- Cannot break any laws
- Cannot unfairly benefit individuals or game the system
- Will not be eligible for the Community Grant Program
- Must comply with the proposal framework.
Otherwise, these proposals will not be funded.
- The Liquity AG treasury will not vote with its LQTY.
Proposal Voting Schedule
The grants will be awarded monthly with the revenues from the 5m staked LQTY of the Liquity AG treasury. There are three phases:
I) Week 1 & 2: Proposal & Discussion
The first two weeks of the month are dedicated to proposal discussion, feedback collection, and, eventually, the formalization of the most credible and widely supported proposals:
- Users suggest ideas on Discourse in the Ideas category
- Other community members can provide feedback and make suggestions
- The proposer considers the feedback and creates a proposal in the Proposal category.
- The Liquifrens Ambassador will create a Snapshot vote with the eligible proposals submitted before the end of week 2.
Finalized proposals are expected before the 15th of any month to be included in the voting round.
II) Week 3: Voting on Snapshot
Voting on proposals will be open for one whole week. There will be a single vote per month, using weighted voting to establish a list of the favorite projects of the Liquifrens. Anyone holding LQTY or staking LQTY can vote.
Once the results of the vote are final, they are matched with the monthly budget, and proposals are funded in order according to the voting rank until the exhaustion of the budget. Proposals cannot be partially funded, and leftover amounts are rolled over to the next month.
III) Week 4: Execution
- This will be done manually during the pilot phase.
- If the pilot is successful, we’ll explore options to streamline the execution process, ideally making it trustless.
Liquifrens Governance Structure & Parametrization
Liquifrens will use Snapshot, offering gasless voting to maximize participation. However, because of the specific structure of the Liquifrens, some parameters need to be adjusted compared to a default setting:
Snapshot Settings
Voting System
Weighted voting: Each user can spread their voting power across any number of choices, from one to all. Their voting power will be divided between their chosen options according to how much weight they attribute to each option by increasing or decreasing the voting power fraction.
This voting process allows voters to express support for more than one option and specify how much they support each of them.
Proposal threshold
proposal validation = basic,
threshold = 10 000
Only author(s) can post proposals
Users need 10K LQTY to be allowed to post a proposal on Snapshot. Still, it’s irrelevant anyway because only author (LiquiFrens Ambassador) will be able to do it — the coordinator submitting the monthly vote (similarly to Convex/Curve gauge votes).
Quorum
200K LQTY support
The Quorum is the amount of votes required to be expressed for the vote to be valid.
Voting Delay
24h
Once submitted, the proposals are visible on Snapshot but voting only opens 24h later.
Voting Period
168h
Once started, the votes will be opened for a full week.
Strategies
ERC20_LQTY
ERC20_LQTY_Staked
ERC20_LQTY_Staked_DSProxy
Both holders of LQTY (in their wallet), as well as stakers of LQTY through any regular front-end (using or not using DSProxy/DeFiSaver) will be recognized.
1 LQTY = 1 vote.
Privacy
Any
This is the default Snapshot setting, meaning that all votes are public.
Validation
None
Once again the default settings, meaning that anyone can vote (as long as they have voting power = they own > 1 LQTY) without any gating (like requiring Gitcoin Passport, or something custom)