- This is a joint proposal prepared by representatives of the Osmosis Community (RoboMcGobo, Johnny Wyles) and MantaDAO (Pragmatic Monkey, Vladimir GG, PostTenebras)
- We are proposing a $50k OSMO<>MNTA token swap between our two Communities.
- MantaDAO will match the received OSMO with another $50k of MNTA in a BOW LP (the AMM built on top of FIN, Kujira’s orderbook DEX).
- Osmosis Community Pool will match the received MNTA with another $50k of OSMO in a +/- 5x position in the Supercharged pool on Osmosis, with the option to re-evaluate this when vaults are available.
- This will result in $200k of OSMO/MNTA liquidity that will make the two tokens tradable with limited price impact against a wide variety of assets on both Osmosis and Kujira thanks to Osmosis and MantaSwap’s multihop routers.
- Half of the LP ($100k on Osmosis) will be owned by Osmosis Community Pool; the other half ($100k on BOW) will be owned by MantaDAO.
- This will sustainably deepen liquidity for OSMO on Kujira in the form of Protocol-Owned Liquidity without the need for any incentives.
- This will enable the Osmosis Community to diversify its treasury and generate a source of income in the form of trading profits from market-making activities.
- This will open up additional arbitrage routes between Osmosis and FIN, resulting in a net increase in trading volumes on both sides.
- This will build a bridge between the Osmosis and Kujira communities, promoting net positive-sum cooperation across the Cosmos.
MantaDAO is a decentralized autonomous organization based on the Kujira blockchain and governed by the MNTA token. The DAO and its token are backed by Protocol-Owned Liquidity (POL) and revenue-generating products, one of which is MantaSwap, a multihop router built on top of FIN, Kujira’s CLOB DEX.
MantaDAO’s mission is to support the entire Kujira ecosystem towards delivering a best-in-class experience to both traders and protocols looking to list their token on FIN, while being profitable for MNTA stakers.
To achieve that, MantaDAO operates two complementary activities: (i) a Development arm building applications and tooling to improve users’ experiences and opportunities across the Kujira ecosystem, and (ii) a Market Making arm focusing on deepening liquidity on FIN’s orderbook via long-term protocol-owned liquidity and sustainable market making programs (i.e. not requiring token incentives).
MantaSwap is the first product developed by MantaDAO and at the time of writing, it is responsible for approximately 15% of all volume on FIN, which generates about ~5.6% APR for MNTA stakers.
Over the last three months, the DAO has accumulated ~$730k (as of 15-Sep-23) of POL spread across 6 MNTA LPs (KUJI, wBTC, wstETH, stATOM, STARS and SHD) and ~$50k in stablecoins ready to be deployed in some new assets. MantaDAO is in discussions with several other protocols and communities to deepen their token liquidity via treasury swaps and sustainable market making programs such as the one discussed in this proposal.
The utility of the MNTA token is primarily to protect the MantaDAO treasury from governance attacks. MantaDAO stores POL in the form of LP tokens inside the DAO treasury. POL is constantly being increased and extended to new assets in order to boost the trading volumes and fees from MantaSwap router, which works on top of FIN and BOW. Each staked MNTA token represents a share in MantaDAO and enables stakers to receive regular distributions from operational income (MantaSwap revenue at present, more revenue generating products will be developed in the future). Since Kujira on-chain governance proposal 450 passed, MantaDAO is able to independently create new pools and trading pairs in BOW and FIN, and, most importantly, flexibly configure existing ones. Thus, MantaDAO truly owns its liquidity at the code level.
MantaDAO is offering a token swap deal where Osmosis would receive $50,000 of MNTA in exchange for $50,000 of OSMO from the Osmosis Community Pool (exchange ratio will be based on 10-day TWAP at the time this proposal is executed).
MantaDAO will pair the received $50,000 OSMO with an additional $50,000 of MNTA from its treasury to be provided as liquidity on BOW (the AMM built on top of FIN, Kujira’s orderbook DEX) into the OSMO/MNTA pool.
Likewise, Osmosis Community will pair the received $50,000 MNTA with an additional $50,000 OSMO from the Community Pool that will be provided as liquidity in a +/- 5x position in the Supercharged pool on Osmosis with the option to re-evaluate this when vaults are available.
If accepted, this proposal will greatly increase OSMO liquidity on Kujira, and facilitate several liquidity routes through the OSMO/MNTA pair. In particular, this would enable users to trade OSMO across most of the pairs available on FIN, including axlUSDC, USK, ATOM, KUJI, wBTC and wETH at very low slippage via MantaSwap’s multihop router. This is made possible by routing trades via the >$200k MNTA/KUJI LP mostly owned by MantaDAO that acts as an intermediary step to the deepest KUJI pools on FIN (e.g. to trade OSMO for axlUSDC, the route would be OSMO<>MNTA<>KUJI<>axlUSDC).
This will result in a total of $200k in liquidity for the OSMO/MNTA pair (half on Osmosis, half on BOW) and $100k in revenue-generating POL for both the Osmosis Community Pool (on Osmosis) and MantaDAO (on BOW).
The proposed token swap will provide several benefits to Osmosis:
- Sustainably deepen liquidity for OSMO in the form of POL, without the need for any incentives.
- OSMO and MNTA are locked in liquidity pools, thereby reducing risk of either protocol causing unnecessary sell pressure.
- Facilitate intelligently routed swaps for OSMO on FIN and allow Kujira traders to trade against axlUSDC, USK, wBTC, wETH, ATOM, KUJI and more at very low slippage.
- Diversify Osmosis Community Pool treasury and create a new source of income in the form of trading profits from market making activities.
- Open up additional arbitrage routes between the two DEXs, resulting in a net increase in trading volumes on both sides.
- Build a bridge between the Osmosis and Kujira communities, promoting net positive-sum cooperation across the Cosmos.
MantaDAO is seeking to collaborate with the Osmosis Community to continue its strategy of expanding POL and forming market making partnerships across Cosmos.
MantaDAO has a first fully built product (MantaSwap) already generating ~$13k of annualized revenue and growing fast (+44.3% in August). The MNTA token is already backed by ~$780k of POL (corresponding to ~29% of the MNTA circulating market cap), with clear plans to further expand. For a detailed overview of MantaDAO finances, please check the latest monthly transparency report.
- Divergence Risk: Assets may experience significant divergent price movements during high volatility periods, resulting in impermanent loss (IL).
Note that while the language of the proposal mentions a $50k swap, each party utilizes a total of $100k of its assets in this collaboration to provide a total of $200k in liquidity for OSMO/MNTA.
After addressing any questions or concerns from the Osmosis community on the governance forum, should the proposal pass, the token swap deal and LP provisioning process will be as follows:
- The Kujira team will act as the intermediary for Kujira on-chain operations. MantaDAO community launches and votes on the proposal to send $100k worth of MNTA from the governance-controlled MantaDAO treasury wallet to Kujira team operational address: kujira1zspr6va4ev78lpsh48s57nv6szxj4cdywt2kkg.
- $50k of this amount will be used for direct exchange with the Osmosis community. The remaining $50k MNTA will be used for LP matching with $50k OSMO received from the Osmosis Community Pool.
- A 2/3 multisig address controlled by members from the Osmosis community will be created for Osmosis on-chain operations. The multisig members are:
Golden Ratio Staking (https://twitter.com/GoldenStaking)
MantaDAO community posts the on-chain Community Pool Spend Proposal for the Osmosis community in order to transfer $100k OSMO from the Osmosis Community Pool to this multisig address: osmo1rfcf70z0052zsjp9kz9zgal93exljj3fgka75wve0e3sazq724mqv2vqdm.
$50k OSMO of this amount will be used for direct exchange with the MantaDAO community. The remaining $50k OSMO will be used for LP matching with $50k MNTA received from the MantaDAO community.
- If the on-chain proposal passes, the multisig members on Osmosis perform the IBC transfer of $50k OSMO to Kujira team operational address: kujira1zspr6va4ev78lpsh48s57nv6szxj4cdywt2kkg.
- In parallel with 3, Kujira team sends $50k MNTA via IBC to the multisig address on Osmosis: osmo1rfcf70z0052zsjp9kz9zgal93exljj3fgka75wve0e3sazq724mqv2vqdm.
- The Kujira team executes the LP matching of the received amount of $50k OSMO and $50k MNTA in BOW (https://bow.kujira.network). Then Kujira team sends the LP tokens along with the rest of MNTA to the MantaDAO treasury address: kujira15e682nq9jees29rm9j3h030af86lq2qtlejgphlspzqcvs9whf2q00nua5.
- Members of the multisig on Osmosis match the received amounts of $50k MNTA with $50k OSMO on Osmosis. If there are some MNTA or OSMO left from the matching, that small amount of MNTA or OSMO is also sent to the Osmosis Community Pool. The pairing will be held in a +/- 5x Concentrated Liquidity position in the MANTA/OSMO Supercharged pool until they can be deposited into a vault to auto-manage the position. Tokens representing the position or vault holding must be sent to the Osmosis Community pool if possible. The liquidity position will be owned by the Community Pool even if the position is non-transferable and custodied by the multisig and no further operations beyond the scope of this proposal will be carried out without Osmosis governance permission.
As a result:
- Osmosis community obtains a permanent $100k of POL for MNTA/OSMO on Osmosis.
- MantaDAO obtains a permanent $100k of POL for OSMO/MNTA on Kujira.
The proposed token swap between MantaDAO and the Osmosis Community Pool represents a strategic collaboration that is expected to deliver mutual benefits and promote net positive-sum cooperation across the Cosmos. The partnership is a highly cost-efficient solution to deepen OSMO liquidity on FIN, enabling larger trades with reduced price impact, and opening up additional arbitrage routes between the two DEXs, resulting in a net increase in trading volumes on both sides. The deal is structured as a token swap, which means it is effectively a zero cost solution for both protocols. Given the liquidity will be owned by the Osmosis and MantaDAO protocols, it won’t require any LP incentive. Finally, it will enable Osmosis Community Pool to diversify its treasury and generate a source of income in the form of trading profits from market-making activities.
There is a total supply of 100m MNTA with 10.3m circulating, of which 5.0m were airdropped to KUJI stakers at genesis. The remaining 89.7m supply is DAO-governed and being utilized in a controlled, data-driven manner to build POL (mostly) and fund development of revenue generating products. Methods of fundraising include mutually beneficial treasury swaps and market-making arrangements, public OTC deals, bond sales, etc.
On the market-making front, two treasury swap deals have already been successfully conducted:
- $50k swap + $50k LP matching with Stargaze community pool, resulting in $200k STARS/MNTA liquidity on FIN ($100k POL for MantaDAO).
- $50k swap + $50k LP matching with Shade Protocol, resulting in $200k SHD/MNTA liquidity, of which half on FIN ($100k POL for MantaDAO), the other half on ShadeSwap.
- Several treasury swap conversations are ongoing with other protocols.
MantaDAO has also started accumulating KUJI, wBTC, wstETH and stATOM, all paired with MNTA in BOW LPs. In total, MantaDAO has accumulated ~$780k worth of POL as of 15-Sep-23.
On the development front, several other products are in the making, including:
- Various custom market making vaults that will place orders on FIN and complement BOW (Kujira’s first AMM built on top of FIN).
- Squad, a DAO Platform allowing any project to easily launch a DAO on Kujira and manage its treasury (based on MantaDAO’s own governance smart contracts).
- Various vaults, leveraging other pieces of the Kujira infrastructure, such as the liquidation engine ORCA, and the money market GHOST.
- Each of those products will generate fees for MantaDAO.
MantaDAO’s DAO Dashboard
MantaDAO has built the first custom built on-chain DAO platform for Kujira that includes a UI to allow the DAO to manage its treasury and deploy its own proposals for governance. This will soon be expanded as Squad Protocol, a DAO-as-a-Service dApp, for other DAOs on Kujira to use.
MantaSwap UI on Kujira Mainnet
MantaSwap is a custom multihop router for FIN that allows for seamless any-to-any token trades (as opposed to being limited to trading within the pairs listed on FIN, e.g.MNTA<>OSMO). It enables users to find the optimal route from any input token to any output token and capture arbitrage between pairs listed on FIN. Swaps conducted on MantaSwap charge a 0.1% fee that goes to MantaDAO treasury. MantaSwap has been integrated as the default swapping interface on Sonar (Kujira’s mobile app) and will be integrated to Kujira web apps in the near future.
At time of writing, around 15% of all trading volume on FIN is routed through MantaSwap and the protocol has facilitated about $1.9m of trading volume since launch on 29-May-2023. Fees collected by MantaSwap have been distributed weekly to MNTA stakers and currently equates to ~5.6% APR.