Liquidity Solution A -- Tokemak

Governance Proposal 1

Silo Liquidity Solution A

Proposed by Wchood and Chutoro

Related Discussion from Discord can be found here :

Additional notes are in the posts immediately after the link directs you to

DATE : 12/14/21

Summary TL;DR : This proposal is aimed at gathering the community’s input and making a decision as to what the optimal path is for bootstrapping liquidity for SILO tokens in a capital efficient manner through a variety of options available.

Abstract: As everyone is aware, deep liquidity is critical to enable large trading volumes with minimal slippage, and without it, many large players will avoid the token overall due to the high transaction costs of many small orders, time required to build large positions, and potential fear of not being able to exit positions in a timely manner should they have been willing to deal with problems one and two and built a large position. This proposal aims to partner with Tokemak to fire up a Silo reactor through a DAO to DAO swap of SILO for TOKE and acquire deep liquidity in the near future when Tokemak begins liquidity deployment in late December/early January.

Aside from acquiring liquidity through Tokemak, Silo would also be acquiring TOKE at a time when its price has dropped significantly relative to Silo which helps further diversify our treasury holdings with a token from a quality Defi project. These TOKE holdings can be used on Tokemak to direct liquidity to our Silo reactor while earning an APR on the TOKE and SILO deposited to further grow our share of liquidity directing power and TOKE holdings.

A Silo reactor from Tokemak will solve the problem everyone has been talking about which is lack of liquidity. From a financial perspective, I believe diversifying our treasury with TOKE will be positive over the long run for two reasons:

  1. TOKE pays out significant APR’s (we can also sell our TOKE rewards weekly for ETH or USDC to further diversify our treasury)
  2. Tokemak intends to reach singularity and end their token emissions prior to the actual max circulating supply ever being reached thus benefiting the TOKE price as more projects spin up reactors and will need TOKE to direct liquidity(increased buy pressure as Tokemak becomes a launch pad and LaaS protocol with permission-less reactors going live planned in the future)
  3. SILO swapped for TOKE to ignite the reactor will essentially be taken off the open market and can’t be sold

From a Social perspective, Tokemak has a strong community and team and being one of the early projects on Tokemak will give us much needed marketing/exposure to their community and all the other protocols that have reactors(FXS, ALCX, SUSHI, OHM, TCR, VISR, APW, FOX, and SNX/ILV are still in the process of firing up reactors since the last core event).

How will this impact SILO from a governance perspective? In my view, this won’t have an impact on governance since the SILO tokens on Tokemak are locked in and cannot be sold and wont carry any voting power as far as I know.

Benefits: This proposal will be a major step forward for Silo as we will be receiving much needed liquidity in return for TOKE which can be used to generate additional yield. Single sided staking of Silo tokens will also encourage more holders to take part as they are protected from IL. This will also be the first major marketing exposure the project has received since the hackathon which will come essentially at no cost to the protocol. As of right now, I’m not sure what the emissions rate of Silo would be but if we go this route we can also cut emissions and any Silo earned by Tokemak will go to their PCA and not sold on the market.

Risks: The primary risk in this proposal is smart contract risk on Tokemak’s end. Although I do not have a developer background, the Tokemak team seems to be a very high quality group of individuals and this is a risk that comes with any smart contracts.


Yes - voting yes means you are in favor of partnering with Tokemak and completing a DAO to DAO swap of assets to get a reactor ignited and liquidity provided within the next couple weeks to a month. We propose $2m USD worth of SILO swapped for $2m USD worth of TOKE to initially capitalize the reactor.

No - voting no means you are not in favor of utilizing this option as a liquidity solution or at least not with the terms delineated above.


I am strongly in favor of this proposal. Rather than a typical liquidity mining setup where mercenary capital floods in, farms and then dumps, this proposal will allow the Silo DAO to direct liquidity when and at it’s preferred venue (Uni, Sushi, etc). Additionally, it will give Silo holders the chance to earn APR on Silo (in the form of Toke) without the risk of impermanent loss (the Tokemak protocol bears that risk).

Finally, I have been following the Tokemak protocol for a while and I’m extremely impressed with them. Silo as a smaller project looking to establish deep liquidity is a perfect use case for their protocol.


I would be in favor of this to start. Once we have some solid initial liquidity in the future we could join Olympus Pro to guarantee liquidity long-term.


We are going to be adding another discussion post including Olympus here shortly, this was just the start :wink:


For Olympus feel free to look here: Liquidity Solution B - Olympus Pro


already consulted , will note buddy :grinning:

Already consulted with tokemak?

Don’t konw how to ust that!

I’m in favor of this proposal.

Frax and ShapeShift have invested Silo and both of them have reactors on Tokemak, while project needs a vote to be eligible to create Tokemak reactor, our investors could bring significant advantages to Silo in the vote (As seen Frax have helped TempleDAO during the vote: Snapshot).

Besides, Tokemak could provide rewards to Silo depositors in the form of TOKE in which deposit Silo in Tokemak may attaching more users than purchase bond from Olympus Pro with an vesting period.

However, instead of selling Silo in return for TOKE, I think we could use treasury ETH to do that so it won’t harm Silo price (Actually I have no idea whether the current liquidity of Silo could bearing that selling)


First and foremost, Thanks for writing this proposal.
(My comments are not meant as criticism)

Generally I think both posts are a good idea.
I personally need to do more research on Tokemak protocol but I have a general understanding.

Are any of reactors live yet? (if not when do they intend to go live?)
Should Silo wait (X weeks) for the reactors to be live for X nr weeks in order to them to be tested and more established?

Would Silo be buying Toke from the open market or a Dao to Dao swap?
If its a Dao to Dao swap, I have seen other protocol use a 30day moving average of the price, which could be deemed a more reasonable option?

I think this comment needs to be looked at on a wider level

““TOKE pays out significant APR’s (we can also sell our TOKE rewards weekly for ETH or USDC to further diversify our treasury)””

If we are trying to a line ourselves with other communities, discussing/ suggesting to dump/sell (other protocols) tokens would not be good look for Silo as this work both way (ie what is to stop other communities dumping Silo)

The proposed $2m swap, how was this figure arrived at?
How does this compare to recent other protocols who have recently launched such as APW, VISR and FOX.

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So the reactors are open for deposits but active liquidity deployment has not gone live yet. I believe they have that planned for late Dec/early Jan. The swap would be an exchange, and like you said, use some average(not sure what amount of time that can be discussed).

With regards to selling rewards received from Tokemak, I was thinking of it in the scenario that we don’t need the TOKE to balance the TOKE side of the reactor then it may be beneficial to diversify our treasury and move it into stables/eth etc

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Personally prefer this over Olympus due to the no minimum emission requirements. Having TOKE in our treasury could be used to direct liquidity to our individual silos too if Tokemak plans on allowing directing to lending protocols as well as AMMs in the future

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