We propose deploying 897 ETH from SiloDAO’s treasury to bootstrap liquidity in silos.
For ease of deployment and rebalancing, we recommend moving ETH to the development fund that is controlled by the core team. The amount of ETH to be deployed as well as silos that would receive liquidity can be determined by token holders via snapshot voting. Unused ETH can remain in the development fund for future uses following the governance process.
As a newly deployed lending protocol, silos need liquidity to generate traction and build trust. Without initial liquidity, there are no borrowers. Liquidity is especially important when we create silos for token assets that do not have markets elsewhere as it serves as a proof-of-concept for the effectiveness of Silo’s design. With some ETH in new silos, we can collaborate with other communities to bring more eyes to our project.
ETH in our treasury is also currently sitting idle. By deploying to our own markets we will be able to earn interest on our borrowings. This will allow us to grow our treasury in a sustainable manner.
- Accelerate usage of our protocol by bootstrapping initial liquidity.
- Co-marketing opportunities with communities/DAOs that can make use of our isolated lending markets.
- Revenue to the treasury from interest income.
- In the event of smart contract or oracle exploits, the treasury would bear the loss which would shorten the runway of the protocol.
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