Proposal to alter the distribution mechanism of $FRY

As you know, $FRY is emitted from the bucket sale at sale.foundrydao.com

Since starting the sale we’ve added experimented with 2 other mechanisms to see if we could improve the liquidity of $FRY and the interest in the project; the first was the permafrost sale where we sold $FRY in exchange for ETHFRY liquidity on a balancer pool with 10% fees, the second was the yield farm over at dashboard.foundrydao.com/#/farm, where we handed out 2 million $FRY in exchange for ETHFRY liquidity on Uniswap.

The first experiment yielded around 7k USD in permanently locked liquidity by it’s end.
The second increased our liquidity on Uniswap by around 200%, and that was without significant marketing.

The importance of liquidity has many aspects.

  1. It increases visibility and provides social proof that the project is indeed interesting.
  2. It allows bigger speculators to more easily enter and exit a project. Something they are not willing to do if their slippages are very high for trades.
  3. It increases the value of the $FRY being held by the treasury.
  4. It increases the treasury income that is the result of speculators arbitraging the secondary market against the sale. In other words people buy low at sale.foundrydao.com and sell high on the market and then repeat the process.
  5. It give existing FRY holders assurance that they can exit into a liquid market should they wish to, and often there is no greater assurance that people will stay if they know where the exists are.

Proposal:
I want to propose that we

  1. Instate the permafrost sale as a permanent way to disburse FRY until the end of the main sale. I recommend a rate of 15,000 $FRY per 7 hour period.
  2. Launch at least 12 yield farming programs where we give away $FRY in exchange for providing liquidity on various token pairs. The pairs to be decided at the time of launch of the yield farm. I propose we mint sufficient $FRY to match an average rate of 15,000 FRY per 7 hour period.
  3. That a snapshot be taken immediately before 1 and 2 are enacted and that all $FRY token holders receive as much $FRY as they currently hold. This will be to ensure that the capital structure of $FRY stays exactly the same for early participants so that they suffer no effective dilution. This will include a calculation around how much $FRY existed in the various liquidity pools and to which LPs, they too will receive the $FRY drop and be protected from dilution without having to withdraw their liquidity.

I believe we will net at least $1,000 per week in permafrost liquidity even at the current lulled rates, meaning the permafrost will be at around $65,000 by the end of the sale, assuming no progress in terms of market interest. I also believe that the yield farming programs will have a multiplicative effect on the level of total liquidity as it has with the current yield farm.

  1. I assume the purpose of this is to establish which token paired with $FRY yields the best return in terms of TVL and volume.
  2. My concern would be that we fragment the liquidity between pairs and that it would increase slippage in some instances. If, however, the ETHFRY liquidity pool remains fairly the same as now (or increases) throughout the period, this point is not a concern for me.

The great thing is that the contracts we use to distribute the rewards can actually be run in parallel and for varying periods of time.

The purpose would be to reduce slippage and to incentivize other communities to become participants in Foundry and to hodl $FRY.

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Tha makes sense, and what we want is more liquidity to stabilise the price, as it has recently with the farming experiment.

Will wallets with unclaimed fry from the bucket sale be included in this?