Allow up to 1 million total pKLIMA from the DAO allocation to be utilized for bolstering KLIMA-paired liquidity pools.
Disband an additional 25% of BCT/USDC LP to deepen KLIMA/USDC liquidity and better utilize capital.
The community allocation of pKLIMA is a strategic reserve that can fulfill key DAO initiatives requiring KLIMA, such as seeding new liquidity pools or bolstering existing pools. The initial use of pKLIMA to deepen our KLIMA/USDC LP is an example of how we can utilize pKLIMA to direct treasury funds where they are most needed.
In the two weeks since our deployment of 100,000 pKLIMA per KIP-16, we have seen KLIMA trading utilization for USDC vs. BCT increase from roughly 45% to 75%, reducing slippage as KLIMA onboards users and facilitates the market.
We must be mindful of the fact that redeeming pKLIMA is essentially pulling inflation forward to today, and then assigning the benefits of that KLIMA production to a specific use. In our first case, it was expanding the horizontal development of KLIMA and reducing slippage for users by centering trading around the KLIMA/USDC LP. In order to counteract the inflationary impact of this pull-forward, Policy correspondingly reduces bonding emissions for the KLIMA/USDC pair. Further increase of the KLIMA/USDC is desirable now to position a robust pool of liquidity at the center of the ReFi ecosystem, which will similarly be counterbalanced with reduction of KLIMA/USDC bonding.
As the protocol matures, delegating a liquidity bolstering budget of pKLIMA to Policy will allow future efficient expansions of liquidity, within the bounds and powers allotted by the community. This initial 1,000,000 pKLIMA (of 480,000,000 total pKLIMA community budget), will serve as a case study for delegating limited authority to Policy. A community announcement will be released within one week after any completion of a liquidity bolstering exercise via pKLIMA.
Policy requests permission for the following:
1) A strategic liquidity bolstering budget of 1 million pKLIMA, to be utilized no more frequently than once every 2 weeks, in batches not exceeding 3% of circulating KLIMA supply.
2) Disband an additional 25% of the current BCT/USDC liquidity, for similar reasons outlined in KIP-13, based on current % utilization and trade size of this pool.
The informal forum poll begins now and will end March 25th, 18:00 UTC. Assuming in favor, this vote will go to Snapshot.