[Signaling Proposal] Budget increase and restructure of Liquidity Council

OBJECTIVE:

The purpose of this governance proposal is to bring about strategic changes in the composition of the Liquidity Council and its allocated budget in order to further strengthen the operations of the Council and ensure the amount of liquidity being provided to projects is reaching the desired levels. In the current framework, there’s a general cap of liquidity provisioning of 250,000 ARCH per request without requiring passing of on-chain voting. It’s been notable that the current limits provide little liquidity to projects and limits their ability to reach the needed levels of volume of ARCH.

After receiving initial feedback from the community on the past governance calls, and in particular on governance call of 11/9, the Liquidity Council, on behalf of the community, proposes the following changes:

Liquidity Council Restructuring:

  • Jordan Xavier “JXR”, current member of the Liquidity Council, will be replaced.
  • An additional member representing the community will be added to the Liquidity Council so that there is equal representation in the Council between the community representatives and Archway core contributors. By adding one more member, the composition of the Council will be as follows: 3 community members, 2 Phi Labs representatives and 1 member from the Archway Foundation. The MultiSig will require a 4/6 passing threshold.

Budget & Liquidity Top-Up:

  • We propose that the maximum funding allocation per project be increased to $300,000 worth of ARCH spread out in up to 3 requests or grants per project.

  • The foregoing will apply retroactively to current liquidity recipients. This means that a one-time liquidity injection of ARCH will automatically be provided to each existing approved submission, up to the maximum allocation of $300,000 per project. Existing allocations of 250k ARCH will be topped up to the current market value of $100,000 in ARCH up to this limit.

  • The overall budget of 5,000,000 ARCH of the Liquidity Council Pool will be increased to $1,000,000 USD worth of ARCH and funds will be transferred from community pool progressively as more capital deployment is approved by the Council.

Execution of Liquidity Provisioning:

  • Technical calls shall take place with each team post-submission approval to ensure the transaction can be formatted properly to try to speed up on-chain allocations.

Implementation Plan:

*** Liquidity Council Restructuring:**

  • We will advertise the open positions within the Liquidity Council over Discord and Archway’s social media. Any interested candidates who demonstrate to be an active and non-conflicted participant within the Archway community can volunteer himself/herself in the forum.

Liquidity Top-Up:

  • The funds for the liquidity injection to current approved projects will be sourced from the Liquidity Council’s community pool upon passing of this proposal.
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I think this is great! Could we add an exception where we can allow off-chain liquidity injections if agreed upon by the community?

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Sounds reasonable but could you provide an example of one of these types of submissions?

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Sorry for not chiming in sooner, but as one of the members of the Liquidity Council I completely concur with the changes.

We will do our best to expedite requests and provide greater liquidity after this is voted on by the entire community :ballot_box:

Gratefully,

Phunky

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This sounds very interesting. Can you elaborate a bit more on what those off-chain injections would look like? would they be under a request-basis or is it more like something the council would actively look for?

I think this could be something that the wider community votes for, such as participating in a program like Injective’s OLP or doing a liquidity swap, and is executed by the liquidity council.

Hey sorry I’m getting to this late.

I like the idea, just have a couple questions on it.

  1. How do ARCH funds get transferred from the Community Pool to the LC? Does it require additional spend proposals? I’m totally cool with the expanded amounts, but like, if the price of ARCH dipped could this give the LC control of all Community Pool funds? Just wanna red-team it a bit to make sure we’re agreeing to something safe.
  2. “up to 3 requests per project” - just wanna make sure this is verified in writing as it was discussed on the Governance call, that this is in reference to specific requests, not project-specific. Many of the easy-pass early LC spends have been on Astrovault, and each of them should be subject to the $300k maximum, not the entire Astrovault application.
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Posted this on another forum but wanted to include my thoughts here as well:

In regards to the thresholds I do believe both the Liquidity Council budget and maximum distribution amount should be increased to help facilitate more meaningful liquidity provision.

I would suggest raising the liquidity council budget to $1,000,000 USD (or ARCH equivalent) and the maximum distribution amount of $150,000 USD (or ARCH equivalent).

As for the signing members of the multisig I support increasing the council and adding two more signors from the community (i.e. not from Phi Labs or Archway Foundation) to help further decentralize the council and provide the Community more power in determining the distribution and use of community pool funds allocated to the council.

Reiterating this from 25 days ago, when in multiple governance calls we had all agreed that this was a max per request.

I wrote this comment just to solidify receipts in case a change in interpretation were to take place because it hadn’t been properly enumerated in writing. In today’s governance call it was interpreted as per project, but perhaps other project but not per dapp. That’s better than forcing the core DEX under a $300k limit, but is still not what was initially agreed upon as the intent behind the raised cap.

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