Deploying Protocol Owned Liquidity

One of the issues that still plagues defi is the lack of liquidity. I propose we utilize some of the protocol’s treasury to add to STBL2 LPs. Not only will the protocol collect fees with these LPs on unused assets, we will also see less price impact on the DEX as time goes on.


I’d love to see the protocol’s treasury put to work! So long as the treasury is collecting dust from everyone’s loans, it should contribute to the protocol somehow. If all of the STBL2 and USDC in the treasury were to be allocated to the USDC/STBL2 liquidity lending pool, the treasury could earn and compound a substantial income stream as well as earning BANK for itself. This could add a whole new layer to governance which manages the treasury like an on-platform portfolio, which could potentially flood the list of proposals if it isn’t somewhat organized. Maybe we could all agree to vote on asset allocation changes monthly like we’re currently doing with BANK rewards. PoL needs exploring on Algorand, and this sounds like a great start.


I like this idea, and think we could take it a step further. Protocol funds used to LP and generate revenue could then in part be allocated to something like BANK buybacks to increase user value over time.

Would this be anything like an improved version of the Olympus DAO experiment? I can see how building POL for a BANK-STBL2 LP makes sense.

Solid proposal. Would there be any impact on STBL2 peg stability measures if STBL2 used to provide incentives is tied up in STBL2 LPs or loss due to IL?

What is the purpose of the treasury anyhow? Isn’t it supposed to be a totally risk free pool of money to pay out rewards, interest, etc? Or, am I misunderstanding? With my current understanding, I can’t see why it is a good idea to take a pool that is supposed to be risk free, and then introduce risk to it.

Broadly speaking it can be to help build the business i.e. “business development opportunities”, bug bounties and Algofi ecosystem building. This could be to incentivize developers, building partnerships, etc…

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Whilst I understand that Algofi is a for profit business with investors, it would be nice to have a modicum of transparency on protocol revenue and where it goes. A portion of that ideally would head back to the community via liquidity or something else beneficial.