Market Making, Operations, and the Future
An impromptu "State of Tokemak" from LiquidityWizard outlines the protocol's growth and plans for the future.
The Easter Bunny rugged us of our usual Leaky Sunday alpha this week, but Liquidity Wizard has just dropped a huge update in Discord.
- GSR has been engaged to begin market making across centralized exchanges. This will begin with Gemini (where TOKE was recently listed).
- Another major exchange will be listing TOKE "imminently".
- In the past 30 days, Tokemak has grown the PCA by over $4M. This has been done with only 20% of TVL deployed.
- For C.o.R.E.3, a new mechanism will be used in favor of DAO<>DAO token swaps. This will further grow the PCA.
- Locked tokens and DAO reserves have increased.
- Locked tokens will begin vesting February 2023.
- Current annualized growth is ~$55M.
- An upcoming update will allow ETH stockpiles to be deployed to Curve, generating additional revenue.
- The Liquidity Multiplier is currently 0, so only Reserve assets are being deployed. This will be increased to 0.5, substantially increasing deployed assets.
- "pAssets will be the gasoline on the fire" – expect a Medium article detailing the new "permanent asset" mechanism to drop this week.
- A roadmap outlining the path to the Singularity is in the works.
- See the full announcement for more!
Hey Pilots, we have multiple updates across the board for you, spanning market making, ops, and the future.
Market making update
Today we are engaging our exchange market maker, GSR, to begin market making across centralized exchanges. Initially they will be targeting Gemini, and moving forward they will provide liquidity across multiple exchanges. One major additional exchange will be listing TOKE imminently, and we have good reason to believe many more major exchanges will be following shortly behind. To this end, we are lending 300,000 TOKE to GSR to cover the inventory they will need to make markets. We are excited about GSR’s expertise and what deeper liquidity on more exchanges will mean for TOKE.
Tokemak has generated over $4.4M in growth to our Protocol Controlled Assets (PCA) over the last 30 days. And we are just getting started, with only a bit more than 20% of our TVL deployed. This will start expanding rapidly (see future section below).
The DeGenesis and CoRE events took up less tokens than originally budgeted, taking up only ~3.2M tokens rather than 5M. (Note that a new mechanism will enable us to grow our PCA for the CoRE3 assets, rather than a direct token swap with TOKE.) Due to this, we have an additional ~1.8M tokens that have been added to the DAO Reserve bucket.
Since our token breakdown was announced in June 2021, approximately 1.5M in token incentives from the Reserve have been used to attract some of the best talent in DeFi and grow the team to where we are today. These excellent builders, contributors, and advisors that joined our team agreed to lock their token incentives, which increased the total locked tokens from 56M to 57.5M. Net of all of the above, our DAO Reserve portion has actually increased from 9M to 9.3M tokens (plus 1.8M less 1.5M). These locked tokens are in our staking contract, and they do not begin vesting until February 2023, which is the first date in a year-long linear vesting period ending in February 2024 (as previously discussed).
Here are the updates to the overall token breakdowns:
Update on the future
Building on our current run rate growth of ~$55M per year, we continue to increase liquidity deployments to grow our PCA and move towards the Singularity. We are attacking this on multiple fronts. We are currently pushing an update that will allow us to profitably deploy our stockpiles of ETH to Curve, which will increase revenues.
Additionally, we are beginning to scale up our Liquidity Multiplier. This is the tAsset : Reserve ratio we deploy on top of the Reserve for each Token Reactor. We are moving from a 0 Liquidity Multiplier (i.e. 0 tAsset : Reserve liquidity deployed; so only the Reserve is deployed) to a 0.5 Liquidity Multiplier (i.e. 0.5 tAsset : 1 Reserve liquidity deployed on top of the Reserve), effectively giving us 50% liquidity leverage on Reserve using reactor TVL.
The pAssets will be the gasoline on the fire, growing Tokemak in ways that have not yet been unveiled, but will be shortly (article is currently in the works and will likely drop by end of week).
You can look forward to a bunch of updates coming soon, included (but not limited to):
- Article on the shadowy pAsset mechanics within the next week
- Roadmap giving Pilots an idea of what to expect over the coming months as we quickly evolve toward the Singularity
- Collaborations with multiple major protocols
- Launch of Snapshot and Forum for further DAO governance
- Top tier Podcast and AMA sessions
- More CoRE3 details
- TOKE/ETH Curve L2 pool deployment soon
We are about to truly unlock the liquidity bandwidth of the future. Get your popcorn.
via Liquidity Wizard on Discord
Original announcement screenshots below.