ARCH incentives for ARCH / sARCH collateral on Demex

Proposals Proposal Discussions
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Summary

This proposal aims to bootstrap the lending of the ARCH and sARCH token on Demex, an all-in-one DeFi Hub, to further increase ARCH utility by allowing ARCH to be used as collateral to borrow other assets for more capital efficiency. The proposal, put forth by the Switcheo Labs team in close consultation with the Archway team, suggests the use of ARCH incentives to promote this launch and bring awareness to the use of ARCH and sARCH as collateral. This is a signaling proposal to gauge the community’s interest before we can move ahead with an on-chain proposal.

Goal

Archway is a popular multi-chain Layer 1 launchpad for dApps within the Cosmos ecosystem. It has become a preferred blockchain for budding developers to deploy their applications. The native token of the Archway Network is ARCH. It also offers a Liquid Staking Derivative (LSD) called sARCH, powered by Liquid Finance, a dedicated Archway Liquid Staking Protocol.

Demex seeks to collaborate and support Archway as its DeFi Partner, aiming to be the go-to platform for yield opportunities on ARCH and sARCH tokens. We envision this partnership by listing ARCH and sARCH as collateral on their in-app money market, Nitron. Nitron has already integrated various Cosmos and LSD tokens, making it the ideal platform for ARCH and sARCH to gain exposure within the existing Cosmos user base.

This forum post aims to discuss the possibility of offering ARCH incentives on the lending pool token for ARCH and sARCH on Demex’s money market. This initiative would further enhance the utility of ARCH and sARCH, promote buying pressure, and drive wider adoption of the ARCH token.

What is Demex

Demex (Decentralized Mercantile Exchange) is a cross-chain derivatives DEX designed to support any type of financial asset imaginable. Demex aims to make finance accessible and trust-optional while providing an intuitive and familiar user experience.

Nitron is the name of Demex’s lending and borrowing money market. It works similarly to AAVE and supports a wide range of networks and assets. It also has a public liquidation platform, which allows anyone to perform permissionless liquidations on undercollateralized loans via the UI.

Demex exists on Carbon Network, a DeFi-focused L1 Cosmos Network built with Cosmos SDK and is IBC-enabled. The team behind Carbon Network is called Switcheo Labs, a doxxed Singapore Web3 development studio founded in 2018.

Benefits

Archway’s ecosystem has seen impressive growth, fueled by successful developer initiatives. This momentum is crucial to maintain its healthy market capitalization, currently exceeding $55 million. The key to sustaining this growth lies in creating more opportunities within Decentralized Finance (DeFi) and expanding token utility.

Our innovative collaborative initiative empowers users to lend out their ARCH and sARCH tokens on Nitron instead of selling them, directly benefiting Archway’s market cap stability and reducing selling pressure. By depositing ARCH and sARCH tokens on Nitron, users unlock borrowing power, enabling them to leverage their holdings for various DeFi activities and amplify potential yield and token holdings. This, in turn, contributes to the continued growth of Archway’s Total Value Locked (TVL) and staking rewards.

Additional details:

As both chains are IBC-enabled, ARCH and sARCH deposits to Nitron will be done via Demex’s deposit UI which uses IBC transfers which are a lot more secure.

The Proposal

In collaboration with the Archway team, we propose to distribute $10,000 worth of ARCH tokens to incentivize the ARCH and sARCH lending pools. The incentives will be distributed thoughtfully over time to maximize their impact.

Distribution

  • This proposal, if well received by the community, will proceed to an on-chain governance proposal. This will be initiated as a community spend proposal and if passes, it will distribute the authorized amount of tokens to the Switcheo Labs’s dev team address at archway1t8lz3zjv9cyd8x4h060w3hhdnzagm5cusj6wx7.
  • The Switcheo Labs Team will work alongside the Archway Team to ensure that the incentive funds are used efficiently, in a timely and strategic manner to maximize the reach and awareness around this launch. Any unutilized incentives will be transferred back to the community pool fund.

Long-Term Partnership Vision

This collaboration is the first step towards a lasting partnership between Demex and Archway. We envision a future with even more exciting opportunities. Soon we’ll be proposing to launch an ARCH-PERP market on Demex, potentially even with a trading competition to boost engagement. Additionally, we plan to expand into the Carbon Network by proposing a protocol liquidity match deal. This deal would establish a SWTH-ARCH or SWTH-USD liquidity pool on Astrovault, further strengthening our DeFi offerings within the Cosmos ecosystem.

Feedback

If the community has any feedback this proposal or any other concerns, we are more than happy to address them or make changes together in favor of the community. Feel free to leave comments below on this post, or we can engage in a lively discussion on the Archway Telegram channel.

Consolidated reference links

2 Likes
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This looks like a promising proposal, I like the idea of providing cross-chain utility to the $ARCH token. This could open a long-term relationship with the Carbon ecosystem creating synergies between ARCH-SWTH and even the $DMX token once launched.

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Overall this appears to be a mutually beneficial partnership between Archway and Demex and will help bolster the use of Demex products while helping further distribute the ARCH token and attract new users to the Archway ecosystem through exposure to the token on Demex and related applications.

With that said, I’d like to voice my support for this proposal but am open to any feedback or pushback regarding such support.

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Thanks for the proposal. Could you please specify the amount you’re requesting, and is your chain capable of hosting ICA?

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I fully support this proposal!

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Tj from Liquid Finance here. Exciting proposal that our team fully supports - we’re excited to see sARCH be used as collateral within Demex!

If anything is needed from our team feel free to reach out.

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Hey, gang!

Just saw Prop 42 listed in the Archway Discord and wanted to come read about the prop. Love the idea of getting more ARCH out into the Cosmos ecosystem overall, but curious as to the actual ask. I do so for two reasons:

  1. letting community members know ahead of time how much ARCH you’re looking for will allow us to better gauge whether this will provide value to Archway itself

  2. as a member of the Liquidity Council, if the amount is something that we can provide it may be easier to put in a request with us directly rather than having to go through a formal proposal

Thanks in advance and will circle back to read more soon!

Phunky

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Hey Phunky!

Appreciate your support. The ask is stated below in this section. Ended up seeking 68,500 ARCH tokens on the on-chain spend thought to be exact.

I see noted on the Liquidity Council, will approach directly next time around! Still have more planned for our collaboration with Archway, I’d love to get in touch with you.

The Proposal

In collaboration with the Archway team, we propose to distribute $10,000 worth of ARCH tokens to incentivize the ARCH and sARCH lending pools. The incentives will be distributed thoughtfully over time to maximize their impact.

1 Like
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My bad on two fronts:

  1. for taking so long to respond (just circled back to the forum during the current governance forum)

  2. for not realizing that the $10K you highlighted was the entire ask. I thought that was just to distribute as an incentive not the entire ask (which is my fault for not reading it closely enough)

Thanks for the reply and please forgive me for taking so long to respond!