Building on-chain liquidity for XAI


With the approval of SIP-19, XAI has been added to the protocol and is now the second bridge asset on all silos alongside ETH. However, before we make XAI available for users to borrow, we first need to build XAI on-chain liquidity in one of the AMM exchanges. Having AMM liquidity is required for XAI loans to be liquidated smoothly.

The Core Contributors team have outlined 3 initiatives:

Initiative 1

We’re currently working on the following:

  • Obtain a Curve gauge for XAI-FRAXP pool. The goal is to attract liquidity to the pool by incentivizing LPs with CRV emissions. The DAO needs to vote for the use of vlCVX to vote for CRV emissions to the pool.
  • Obtain a Frax gauge for XAI-FRAXP pool to receive incentives from the Frax team for the Curve XAI-FRAXP pool. Combined with our vlCVX, this should help even attract more AMM liquidity for XAI.

Initiative 2

With the DAO’s approval, the core team will deposit up to $1.7M USDC of the development fund to borrow up to 1.5M XAI from the USDC silo. We will then use an additional 1.5M USDC to seed a XAI-USDC Univ3 pool with $3M liquidity. This liquidity is essential because we need to ensure borrowed XAI can be liquidated when loans become undercollateralized. However, the UniV3 pool will only serve as a temporary source of liquidity until we have a Curve gauge.

Next steps

Given the importance of building deep liquidity for XAI onchain, we will create a snapshot proposal requesting the following:

  • Use up to $$3.2M of the development fund to borrow XAI and seed liquidity in the Uniswap V3 pool. The core team will move the liquidity later to the XAI-FRAXBP Curve pool.

  • Use 130K vlCVX to vote for XAI-FRAXBP gauge. Given that we currently use the amount to vote for SILO/FRAX pool, we will have to stop voting for the pool and instead vote for XAI-FRAXBP starting November 2022.

It is important to stress that we will still incentivize SILO/ETH pool on balancer.


Hi Silo team,

Given that the UniV3 pools have been seeded with liqudity, is there a timeline for moving some of that liquidity to seed the Curve FraxBP pool? The pool has no liquidity atm. The proposal for the Curve XAI/FRAXBP pool gauge has passed on Frax but remains in discussion on Curve.

Seeding the Curve pool with some initial liquidity might push the Curve proposal forward.

Thank you for stopping by.
We will be moving liquidity to Curve progressively. Our plan to move to Curve completely in 1-2 weeks. You will see liquidity in XAI/FRAXBP starting this week.
Feel free to DM for more details:

  • TG: aiham_eth
  • Discord: Aiham#9108