# AMM liquidity improvements II **URL:** \ **Category:** đź“‘ Formal Proposals\ **Created:** [March 8, 2024, 5:26pm UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244 "2024-03-08T17:26:10Z")\ **Posts on this page:** 8\ **Page:** 1
**Author:** ![Biaf](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.pareto.credit/biaf/32/213_2.png) [@Biaf](https://gov.pareto.credit/u/Biaf)\ **Post date:** [March 8, 2024, 5:26pm UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244/1 "2024-03-08T17:26:10Z")
### Summary A proposal to discuss improving the IDLE liquidity on Ethereum. ### References - [AMM Liquidity Improvements](https://gov.pareto.credit/t/amm-liquidity-improvements/1176) post - Jul 2023 ## Background Back in July 2023, @Davide shared a detailed analysis to improve the IDLE liquidity > [@AMM Liquidity Improvements](https://gov.pareto.credit/t/amm-liquidity-improvements/1176/1): > > This research introduces some ideas to improve Idle DAO’s current allocation of protocol-owned liquidity and describes tokenomic improvements that can be applied to increase decentralization of protocol ownership. From the launch of an 80-20 IDLE/stablecoin pool on Balancer to a 25k BAL grant application, this post recaps the state of the art of IDLE-based AMM markets and which activities can be quickly pursued to foster liquidity efficiency. > > This proposal aims to increase current protocol-owned liquidity by 2x, diversify AMM venues and pools, and solidify Idle DAO’s treasury. Based on these inputs, the DAO agreed to launch an 80/20 pool on Balancer > [@AMM Liquidity Improvements](https://gov.pareto.credit/t/amm-liquidity-improvements/1176/4): > > This voting pool will focus on these 3 next steps: > > 1. Launch an 80-20 IDLE/USDC pool on Balancer with $40k initial liquidity from DAO’s treasury and set minimum swap fees (\>0.01%) > 2. Place IDLE incentives on Warden to route BAL+AURA rewards to 80-20 pool (amount TBD) > 3. Start the Balancer governance process to apply for a 25k BAL grant - [Balancer 80IDLE - 20USDC pool](https://app.balancer.fi/#/ethereum/pool/0x158e0fbc2271e1dcebadd365a22e2b4dd173c0db0002000000000000000005a5), [0x158e0fBC2271E1dCEbadD365a22E2B4dD173C0DB](https://etherscan.io/address/0x158e0fbc2271e1dcebadd365a22e2b4dd173c0db) During this period, Leagues have also started incentive quests on Paladin to collect BAL and AURA rewards and boost the yield offered on the 8020 pool. ![beIwhE3kfjoDcgnrcZ9xcolWCmm0pVOsshKN2ZOXRiORl2nv_0UumB0CCWTPh39ViKVQxUw6w3PzyQBt--dfbHjEObwIctwiklP5_db-EzSWG5b0C6SYPptTOUBQ](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/2X/1/1a65d7db22ffb2f2e1743acdc91622bacb9adbcd.png) The third step listed and voted on in Davide’s post, i.e. applying to the Balancer 8020 Grant, has been delayed due to the need to adjust the IDLE staking model and the need to have already a live 8020 integration in place. ## Rationale Launched in July 2023 after the [IIP-38](https://gov.pareto.credit/t/iip-38-idle-transfer-to-leagues/1181), the 8020 pool on Balancer offers interesting returns to LPs, generated some volumes, and brought some liquidity. The pool had an average liquidity of $50,000, with a peak of $100,000 (see the [Balancer pool analysis](https://dune.com/balancer/pool-analysis) tool on Dune, where the IDLE pool ID is `0x158e0fbc2271e1dcebadd365a22e2b4dd173c0db0002000000000000000005a5`) ![mN5fC0Xz2X0kWgcVQiF75tkjFcv2hsIO11fLkQB2ut6RrGokrzEK6evQ2On2biKBgHhLdtrzkSe_c-ffmdVVBBxM5BrWk270UBgrKC7zs8ODSPEDVeWzq3F7Oo1O](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/2X/b/b64ebefcce26256d57cf3169ad6f0ae5225c5939.png) Monthly volumes reached the highest level during December 23 and January 24, with an average size of $785. ![wxw1l10yk4LsBUza1VUZ5JLAZmPo7enfCocpRWeNxI2LgUZ41Xio1n1WXYt6ITzxQM6wr2SVw0VKT5Fr45NCVR-4qR3HlCX9MFbuQsOsiJu6FC_jKCvRn-L5ZWi7](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/2X/0/06ed3df4452b777dbbb4ce8663ccf174ccf186c4.png) The fees collected were negligible, but this was expected due to the very low swap fee of 0.5%. Leagues also noted that the Balancer 8020 wasn’t always considered by major DEX aggregators, such as 1inch, 0x, and Kyberswap when swapping IDLE on Ethereum. This seems to be driven by the nature of the weighted pool itself as confirmed by the Balancer team > […] concentrated liquidity will always be competitive vs weighted pools just due to the way they work. The analysis is confirmed by [on-chain data](https://dune.com/queries/2718077/4524431/) that shows that the majority of the swaps were done by MEV bots ![9_59YeMZQb-i2RhDGdCw0kwy0uC_4z5juIa7cXLdQHe-jIPkYNVD2ZI-ae23hOrkgjdG1eQUTC5W3ZS2fQPPmrk2h_q8eMFwWK8DAUhUCMpp7-UGe7A21pDS-rfn](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/2X/1/1fd3d05423378aac284d0e187aea6368b658d45a.png) ## Proposal To improve the IDLE liquidity in the markets, Leagues advise the following steps: 1. Migrate the Balancer 8020 liquidity to Uniswap v3 where the DAO controls two positions in the IDLE-WETH pool (a full-range deployment, and a concentrated position). 2. Decide whether to launch a new stable pool on Uniswap, i.e. USDC - IDLE or swap the USDC balance into WETH. 3. Add liquidity concentrated around the current value and adjust the range through time. The choice to pick Uniswap v3 is driven by the fact that the Uniswap pools currently route the majority (~76%) of IDLE swaps on mainnet (source [IDLE DEX metrics](https://dune.com/idle.finance/idle-dexs-metrics-ethereum) on Dune). ![lWo_r1KMa7tmp_AO6Lw9kEPeFFEy7eg_Hs-zDVPLLY0tfGAhqaXnhgg1ISfi7egsSp891XnHWfJM9Ob-NwCIBn-NqcoNAcUbAsUlFBFNnNxb72s6m_e2Rt9PYGdj](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/2X/7/77d34f82fec51797fa784f1c82900e228884e598.png) Additionally, Idle Leagues suggest using part of the forthcoming treasury to increase the size of the pool. The DAO is invited to share his ideas about the size of the deployment, but we could think about something in the range of $75,000 to $150,000. A deposit in this range should ensure enough size for the IDLE pool, without divesting too many funds from the operations. ### Next steps This proposal aims to concentrate IDLE AMM liquidity into a single pool to reduce fragmentation, dampen slippage, and stabilize the volatility during price swings. All Idle DAO stakeholders are invited to weigh in on the proposal. This proposal will be followed by a Temperature Check vote. If positive, Idle Leagues will move forward to include any action needed in the next IIP and funds management. ---
**Author:** ![shiprekt](https://avatars.discourse-cdn.com/v4/letter/s/ac91a4/32.png) [@shiprekt](https://gov.pareto.credit/u/shiprekt)\ **Post date:** [March 8, 2024, 9:44pm UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244/2 "2024-03-08T21:44:59Z")
Consolidating into one pool and deploying additional liquidity with the upcoming strategic round makes perfect sense. An IDLE/USDC pool probably makes the most sense and an enhancement in size by $100-$150K would be bare minimum IMO to seed the LP with more liquidity during this bull market. ---
**Author:** ![AllinCrypto](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.pareto.credit/allincrypto/32/839_2.png) [@AllinCrypto](https://gov.pareto.credit/u/AllinCrypto)\ **Post date:** [March 8, 2024, 11:07pm UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244/3 "2024-03-08T23:07:44Z")
I agree with this. Uniswap(v3) is, i think, the best place for this. Like mentioned, the most used. Let’s go for the $150K , and hopefully more to come. ---
**Author:** ![L.P](https://avatars.discourse-cdn.com/v4/letter/l/34f0e0/32.png) [@L.P](https://gov.pareto.credit/u/L.P)\ **Post date:** [March 9, 2024, 12:03pm UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244/4 "2024-03-09T12:03:21Z")
IMO, let’s proceed with: Migrate to Uniswap v3. Add $150k liquidity. Do USDC/IDLE. This currently appears to be the best/cheapest route to take. Keep up the good work team! ---
**Author:** ![Biaf](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.pareto.credit/biaf/32/213_2.png) [@Biaf](https://gov.pareto.credit/u/Biaf)\ **Post date:** [March 11, 2024, 9:31pm UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244/5 "2024-03-11T21:31:05Z")
Thanks for the inputs @L.P, @shiprekt, @AllinCrypto. I’ll share soon the voting pools to let you and the DAO members share their preferences. ---
**Author:** ![Biaf](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.pareto.credit/biaf/32/213_2.png) [@Biaf](https://gov.pareto.credit/u/Biaf)\ **Post date:** [March 12, 2024, 6:32am UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244/6 "2024-03-12T06:32:02Z")
### Temperature check voting The voting phase to revamp the IDLE AMM liquidity on mainnet starts now 🗳 ![image](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/2X/0/0d95f52a89e3a1feefb4cd183bac3746ad8f2d55.jpeg) This vote pool will have a different format than the usual temperature checks. DAO voters will be asked to share their preferences on 3 different topics related to the same proposal: | Section | Question | | --- | --- | | 1. | A. Keep the Balancer 8020 IDLE pool | | | B. Migrate the 8020 IDLE pool to Uniswap v3 | | 2. | A. Keep the IDLE-WETH pool on Uniswap v3 | | | B. Launch an IDLE-USDC pool on Uniswap v3 | | 3. | A. Bootstrap the pool with $75,000 of DAO’s treasury (in either USDC or WETH) | | | B. Bootstrap the pool with $100,000 of DAO’s treasury (in either USDC or WETH) | | | C. Bootstrap the pool with $150,000 of DAO’s treasury (in either USDC or WETH) | ➡ Poll for $IDLE holders: [HERE](https://snapshot.org/#/idlefinance.eth/proposal/0x0a710db451733a7da158035cbd423e143bf18ad808f46f6b4d8a7cf24b761f33) ➡ Poll for $IDLE stakers (stkIDLE holders): [HERE](https://snapshot.org/#/staking.idlefinance.eth/proposal/0xed97544af18a6764267b017dc1369a84f4af81ffa9be18db89490419e03d80c3) ⏰ Polls will close on 2024-03-15T07:00:00Z The final $IDLE voting weights will be calculated using the [approved calculator](https://docs.google.com/spreadsheets/d/1BnH9boRmBADuyquvDMh0AmQfF97Zj76sIENKtySLU8o/edit?usp=sharing). Looking to delegate your vote on Snapshot? Follow the official [Snapshot guide](https://docs.snapshot.org/guides/delegation). Let your vote count! ✍ ---
**Author:** ![Biaf](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.pareto.credit/biaf/32/213_2.png) [@Biaf](https://gov.pareto.credit/u/Biaf)\ **Post date:** [March 15, 2024, 11:38am UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244/7 "2024-03-15T11:38:50Z")
### Temperature check results Temperature Check passed ✅ The DAO has shared his preferences about the next steps for the IDLE AMM liquidity improvements: - Migrate the 8020 IDLE pool to Uniswap v3 - Launch an IDLE-USDC pool on Uniswap v3 - Bootstrap the pool with $150,000 of DAO’s treasury ![image](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/2X/7/7e210ea11893c92ff1108274f2a4813e50ce4607.jpeg) Sharing also a full overview of the votes collected as reported in the [official IDLE/stkIDLE calculator](https://docs.google.com/spreadsheets/d/1BnH9boRmBADuyquvDMh0AmQfF97Zj76sIENKtySLU8o/edit?usp=sharing) ![image](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/2X/6/609d4470e74d05d05653a5647678b63e35f24671.png) ---
**Author:** ![Biaf](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.pareto.credit/biaf/32/213_2.png) [@Biaf](https://gov.pareto.credit/u/Biaf)\ **Post date:** [June 28, 2024, 3:49pm UTC](https://gov.pareto.credit/t/amm-liquidity-improvements-ii/1244/8 "2024-06-28T15:49:11Z")
Following the successful [execution of the IIP-39](https://gov.pareto.credit/t/iip-39-update-idle-distribution-steakhouse-usdc-as-a-new-usdc-by-yield-source-transfer-usdc-to-see-the-idle-usdc-pool-transfer-m2-2024-budget/1255/3) at the start of the week, today, we executed the actions voted by the DAO\*. With the IIP-39, we transferred 75,000 USDC to the [Treasury League multisig](https://etherscan.io/address/0xFb3bD022D5DAcF95eE28a6B07825D4Ff9C5b3814), to this end: - 40% of the funds were used to buyback some IDLE\*\* - 60% of the funds were used to increase the token liquidity in the market The table that follows shows a summary of the transactions made | Tx hash | Description | Token | Amount | | --- | --- | --- | --- | | [976](https://etherscan.io/tx/0xcc5d84458ca0838f690046fd4d532173f6dffea0b5a44e6c35693224c43aad2f) | Redeem Uniswap v3 liquidity IDLE-ETH | IDLE | -85,248 | | | Redeem Uniswap v3 liquidity IDLE-ETH | ETH | -3.39 | | [977](https://etherscan.io/tx/0x3bfdbc60188907807034cd31d0f43cd56a86df71fd59d8cdeb45ee1db4db83df) | Redeem Uniswap v3 liquidity IDLE-USDC | IDLE | -38,190 | | | Redeem Uniswap v3 liquidity IDLE-USDC | USDC | -6,849 | | [978](https://etherscan.io/tx/0x776f465cc24e66e8112e2b2580ddb3e98d8041c7b2127eb25cb883c2e21d70ba) | Redeem Uniswap v3 liquidity IDLE-ETH | IDLE | -80,045 | | | Redeem Uniswap v3 liquidity IDLE-ETH | ETH | -0.167 | | [980](https://etherscan.io/tx/0x8876aa9d2c722d5fc0888151f7a4e31beeb7108dbd9eec0f17a77e7015eee226) | Swap USDC to IDLE on Matcha | USDC | -30,000 | | | Swap USDC to IDLE on Matcha | IDLE | 98,044 | | [982](https://etherscan.io/tx/0xeb381abc8f5e8c3bf9e159904244bf449c84e57621408d3a7e8c00d26c6eb575) | Re-deposit liquidity in Uniswap v3 IDLE-USDC | IDLE | 164,888 | | | Re-deposit liquidity in Uniswap v3 IDLE-USDC | USDC | 51,849 | | [983](https://etherscan.io/tx/0x8b5f1644fdde95f764365bf83f1edb0368eedbbdeddad99c2ecd2380875c9131) | Re-deposit liquidity in Uniswap v3 IDLE-ETH | IDLE | 38,357 | | | Re-deposit liquidity in Uniswap v3 IDLE-ETH | ETH | 3.55 | | [984](https://etherscan.io/tx/0x6224ff3f1bf9ead586382a531b544870341c7a7da512b04ba2adffc22f159a69) | Re-deposit liquidity in Uniswap v3 IDLE-USDC | IDLE | 49,000 | | | Re-deposit liquidity in Uniswap v3 IDLE-USDC | USDC | 1,570 | | [985](https://etherscan.io/tx/0x932d3383842f191375857607dd60a052523227f2b917004b3a4a0851c2055a76) | Re-deposit liquidity in Uniswap v3 IDLE-ETH | IDLE | 45,000 | – \* The bootstrap liquidity budget transferred to Leagues was cut in half in line with the final round agreement terms \*\* Before starting the liquidity increase and buyback, we redeemed the current liquidity to avoid any redundancy