I don’t think this would increase Osmosis Revenue by a noticeable amount at all - the only increased taker fees would be through arbitrage since the CL pool is very under-utilized from the low volume to liquidity ratio despite concentration being fairly narrow.
What you’re projecting there is a 4% annualized return in exchange for a relatively high-risk position.
Token swaps for OSMO should be considered on a case-by-case basis, in my opinion.
- These should be based on actual demand for liquidity on chain that is not being currently met by organic growth.
- All token swaps in this event should be able to ask for large quantities with reasoning, but the deployment of this liquidity should be staggered in increments based on average daily volume until the daily volume is no longer impacted by the increased liquidity availability, with any excess being refunded to the DAOs.
In this case, I don’t believe that Stride needs additional liquidity on Osmosis at this time. While STRD liquidity is over half in the passive xyk position as pointed out in this proposal, nearly half of the liquidity is also concentrated within the STRD/OSMO pool.
In terms of alignment, OSMO and Stride already heavily support each other through mutually beneficial allocations. OSMO through Protocol Liquidity supporting the peg of stOSMO to record levels of peg stability and Stride through incentivizing other Stride pairings. Token swaps are not needed for this when there is already an established working relationship between the two groups.
As far as price speculation goes, I am not fully convinced that this unlock has been priced in, although I agree that it has likely been the cause of the drop from $7. Before the TIA launch STRD was worth a third of what it is today. During peak hype, it was worth 4x. Partially due to the low liquidity STRD is still a highly volatile token. With 5% of supply being released to potential airdrop farmers over 5 months into 0.5% of supply as liquidity, this potentially has a large downside to the OSMO pairing and adding liquidity at this time seems ill advised.
I would revisit this in late 2024 when the majority of this unlock has taken place, any potential dilution has occurred and volumes may have increased to require additional liquidity.
This may also be a good time to revive Leonoor’s discussion that was started during the last set of swap proposals: