Greetings Jackal community,
Today I wanted to carve out some time to talk about expanding JKL liquidity & accessibility in a way that does not involve any of the following:
- An OTC
- Emissions to open market participants
Protocol swaps / OTC deals (as are being leveraged by Manta) carry a unique risk as you are trusting the other protocol to not sell your token. Additionally, because you are swapping tokens you are essentially short your own protocol token.
Liquidity emissions are tough because tokens are given to 3rd party liquidity providers that are not as long term aligned as the protocols themselves.
I would propose the following alternative structure that involves both protocols working together to create deep liquidity without incentivizing 3rd parties & without swapping tokens with each other:
Jackal foundation brings $37.5k worth of JKL to ShadeSwap
ShadeDAO brings $37.5k worth of SHD to ShadeSwap
This $75k worth of value is merged into a SHD/JKL LP token
There is now $80k (already $5k of liquidity on the platform) worth of liquidity available for traders to interact with.
The Jackal foundation would own ONLY the JKL portion of the liquidity token.
The ShadeDAO would own ONLY the SHD portion of the liquidity token.
If either community would like to withdraw their portion of the liquidity token, they would give the other community a 30 days heads up after which their portion of the LP token is returned to them.
- Improved JKL liquidity / accessibility
- No emissions to 3rd party LPs
- No speculative risk of owning a 3rd party’s token
- No speculative risk of trusting a 3rd party to own a significant portion of your protocol’s token
- The protocols are the only liquidity providers
- Can withdraw at will
- Impermanence Loss, but only for the single sided portion of liquidity provided.
This is an interesting dynamic. If JKL decreases in value against SHD, JKL will have access to more JKL tokens if they decide to exit the liquidity match deal. If JKL increases in value against SHD then the Jackal protocol has tapped into the liquidity of SHD and appreciated in value which is a collective net win for Jackal.
ShadeSwap is an excellent venue for JKL as we are seeing quite a bit of DeFi success and traction:
- $20M in TVL https://defillama.com/protocol/shade-protocol
- Traders are privacy & encryption friendly, alignment in terms of infrastructure vertical/focus of Jackal
We believe the trading community on Secret Network would massively benefit from being able to acquire JKL on the DEX. Additionally, with our Secret Ethereum campaign on the horizon there will be a variety of ETH users that will gain exposure to the JKL token.
About Shade Protocol
Shade Protocol has existed as a brand since 2021, with multiple product launches in the last two years. We believe private DeFi that is front-running resistant and metadata protective is the future of DeFi.
App: Shade App
Would love to get your feedback on this type of structure, as I truly do believe this is the most protocol aligned risk-averse approach to expanding liquidity.
We’d love to put up a signaling proposal to see if the community would be in favor of this type of collaboration / initiative.
-Carter Woetzel (Shade Protocol Lead Researcher)