About

The purpose of this proposal is to explore whether or not the SPS DAO would like to reorganize some of its unproductive LPs to expand our liquidity on BASE. Currently with price impact, buying $1,000 on BASE has over 1.5% fees which isn't optimal for large buys. With BASE being the easiest on and off ramp to Coinbase for our U.S. users, it could be beneficial to the DAO to start expanding our liquidity positions there.

At this point you may be asking which LPs are unproductive and I've been closely monitoring them all for years at this point. We recently tried opening several new pools and pairing them with other tokens to see if it could have a net positive benefit on our token health and my assessment is that it has been unsuccessful and ultimately just led to us generating less fees on all of our BSC positions without drastically increasing our volume.

We've been trying this strategy for four to five months now and while I do still believe it was worth trying, we need to look at the results and be willing to pivot when things don't pan out. The good news is that if we exit these positions now, we're actually profitable, so this whole experiment was not a total waste.

As you can see from the image above, the $200,000 worth of liquidity we deployed is now worth over $212,000, but we've only earned $366 in fees over the duration of their existence. Overall the return isn't bad if you consider the heavy lifting done by the price appreciation of ETH and SOL, but the fees being earned are very minimal.

We could instead opt to use some of these assets to further expand our position on BASE to allow for deeper liquidity for on and off-ramping through Coinbase while rerouting the BSC liquidity to our deeper position that currently has over $860,000 of liquidity there which already serves our Binance oriented users.

Proposal

If this proposal passes the SPS DAO will take the following actions:

Close positions

Close SPS:ETH position on BSC
Close SPS:SOL position on BSC
Close SPS:BTCB position on BSC
Close SPS:USDT position on BSC
Close SPS:USDC position on BSC

Sell tokens

Sell all ETH holdings on BSC for USDC
Sell all SOL holdings on BSC for USDC
Sell all BTCB holdings on BSC for USDC
Sell USDT holdings on BSC for USDC

Bridge assets

Bridge all USDC holdings on BSC to BASE
Bridge all SPS holdings on ETH to BASE

Expand position

Expand current SPS:USDC position on BASE by 100,000 USDC and equivalent amount of SPS tokens at the time.

SPS Governance Proposal - Reorganize LPs and Expand BASE Liquidity