Mandate Update/Clarification - Pilot Program for Single-Sided "Above Market" Concentrated Liquidity Position

Our current mandate reads as follows: Floordao will NOT a) market sell NFTX tokens nor b) pull LP from collections.

We seek to propose a new strategy which technically violates the above statement, although we (the core team) argue it preserves its spirit. The strategy is as follows:

  • provide a concentrated-liquidity-position (CLP) “above market” consisting 100% of NFTX-TOKEN
  • maintain the CLP until either X days pass OR the CLP completely exchanges NFTX-TOKEN for ETH
  • pull the CLP

In essence, this is identical to providing a limit sell order over some range/price-curve above the current market price.

Why Floordao might want to do this:

  • to get more eth from tokens (in environment where we prefer not to bond) to help support more flexible treasury operations
  • to sell collections we deem we are over-weight according to our current treasury program allocations, but NOT provide immediate sell pressure on them
  • to learn about alternative LP strategies and their dynamics

Why Floordao might not want to do this:

  • provides incremental sell-pressure on our treasury as the market price rises
  • takes away our capital from other yield generating strategies

We welcome community feedback on the topic, and may consider a signal-vote to ratify this as an always on strategy. For now we likely will plan to move forward with no more than a 100 eth allocation before advancing from pilot status.

  • JP
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Personally supportive of this, and concentrated liquidity strategies will help tighten the spread in the NFTX vault that accommodates more volume (and therefore more fees) whilst also giving us a way to rebalance if we are overweight.

The source of these 100% NFTX-TOKEN CL positions will be from existing single sided assets is that correct? For instance, this does not propose that we remove existing infinite range liquidity in favour of single sided concentrated liquidity?

In that sense we never pull infinite range LP, which perhaps helps to clarify part b) of the mandate.

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You are correct on both counts:

  • the SOURCE is single-sided assets
  • we will never remove existing infinite range liquidity according to the current mandate
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