With decent liquidity on the market, we can deploy a lending market for $SILO on Silo Finance Ethereum to provide additional utility for token holders.
1- Secure SILO/ETH Uniswap v3 oracle:
We need to provide 100 ETH plus an equal amount in $SILO to SILO/ETH Uniswap V3 pool to get a secure price feed.
2- Balancer SILO/ETH 80%/20% pool (1% fee):
Although not mandatory, there are three benefits to having the pool:
- Encourage token holders to LP with less ETH needed.
- If the pool increases in TVL, 80%/20% will facilitate larger trades on the upside.
- 1% fee provides a decent floor APR for LPs - the current 50/50 pool’s fee cannot be changed.
- If we model veSILO after veBAL, as suggested earlier in the community, the 80/20 pool can be the pool that users will LP in to receive veSILO, aligning the incentives of LPs and veSILO holders with one rewards stream going to both user groups.
Users will have to migrate from the current pool to the new one. We can increase rewards in 30 days to compensate for gas and encourage migrations.
3- Prevent heavy shorts
We have two solutions to avoid having $SILO shorted heavily,
Make “Disallow Borrowing” the default in the UI. Users wanting to make their tokens borrowable can deactivate the option.
Disable borrowing for $SILO altogether (like it is the case for gOHM).
Please participate in the conversation by replying to this post or on Discord (#proposal-discussion).
EDIT - Answering a few questions from discord
What’s are the pros and cons of listening Silo?
Pros: Use case of holding the token; larger trading volumes because of leverage (if there are strategies)
Cons: Token can be shorted unless borrowing is disabled; governance attack becomes viable (already we have delegated wallets to fend off)
Who will provide the 100Eth and Silo to Uniswap V3? What range will the liquidity be in?
SiloDAO, and liquidity will be placed full range (0 - ∞)
if another protocol with a 5m MC requested to be listed would we consider it?
If there is oracle and sufficient liquidity to liquidate. Silo has > $1.3M liquidity.
- Will we need to apply for a new gauge on Aura and Balancer for the 80:20 pool?
Yes, we need to request a new gauge and ask Vote Market and Hidden Hand to add it - simple to do.