This proposal was inspired by a suggestion from Sunny on a twitter spaces with Levana:
https://x.com/Levana_protocol/status/1735012877390483759?s=20 (50 min into the Spaces, Sunny discusses that Levana needs to do a loan swap)
The text of the proposal comes from a previous proposal: https :// commonwealth.im/osmosis/discussion/6875-proposal-for-loan-swap-of-osmo-to-axelar
And subsequent on chain proposal which passed:
Levana Foundation, Osmosis’ most successful leverage trading platform requests ~$1m worth of OSMO, in the form of a loan to bootstrap the liquidity of the LVN/OSMO pool after the LVN token launch. The loan will be repaid in ~$1m worth of LVN tokens, 3 months after the projected LVN/OSMO pool launch.
By voting Yes on this proposal, Osmosis stakers voice their support for a loan of OSMO to Levana.
LVN/OSMO will be a CL pool on Osmosis, with 0.2% swap fee and no exit fee. We are requesting 1M OSMO (~$1m at current prices, the amount may be adjusted before the on-chain proposal based on the latest OSMO price) to be delivered to an address controlled by Levana Foundation and Osmosis Community Members.
The loaned OSMO, together with LVN tokens contributed by Levana Foundation, will be used to bootstrap liquidity in the pool LVN/OSMO for at least 3 months after LVN token launch.
This proposal was modeled after Stargaze, which was positively received by the Osmosis community. Assuming the proposal passes, the USDC price of the OSMO loan will be determined through the 24hrs TWAP based on the OSMO/USDC pool. The TWAP calculation starts the moment the on-chain proposal passes.
The loan will be repaid in LVN tokens, where the USDC price of LVN is determined through a 30 day TWAP during the last 30 days of the loan. The price calculation will be based on the LVN/OSMO and USDC/OSMO pools.
The LVN repayment value (in USDC) will match the OSMO loan value (in USDC) based on the TWAP calculations. The validity of the TWAP calculations and the LVN repayment amount will be verified and approved by the Osmosis core team.
Common Questions about this proposal:
Q: How much is Levana asking to borrow?
A: $1M of OSMO
Q: What will Levana repay?
A: $1M of LVN tokens
Q: How will the price of LVN be determined?
A: Through the average price on Osmosis DEX over the last 30 days of the loan
Q: What happens to the OSMO after the loan is repaid?
A: After the loan is repaid, the OSMO will be used to ensure the best user experience for Levana users on Osmosis, this could be by leaving it in the LP position, depositing it into Levana’s LP/xLP pools, provide superfuid staking rewards on Osmosis DEX for the LVN/OSMO pool, or other activities inline with the goal of increasing the health and sustainability of Levana on Osmosis.
Q: Why is this a sweet deal for the Osmosis community?
A: After the loan repayment, the OCP will have significant skin in the game with Levana, which is the most popular dapp on Osmosis. As Levana, grows, the Osmosis community will directly benift, and when on chain governance is enabled, the Osmosis community will have significant control over the future of the Levana Protocol.
Q: How will liquidity be provided to the CLP?
A: The liquidity will be provided to help maximize prize discoverability with full range for the 3 month period
Q: What will the ratio be when the liquidity will be added
A: The liquidity will be added roughly 1-2 weeks after the pool is live, thus it will be added at whatever the pool deems current fair market value
- OSMO tokens will be sent to the Levana Foundation and Osmosis Community Member DAODAO address: TBD
- LVN tokens will be sent to the Osmosis community address: TBD
No restrictions or lockups will be imposed on the LVN repayment amount. The Osmosis community is free to decide how to best utilize the funds. For example, the funds may be used to provide protocol owned liquidity on LVN/OSMO, LP incentives, or be distributed to the Osmosis community.
Levana Foundation reserves the option to repay the loan with a flat 1.6m USDC.
What is Levana?
Levana is a decentralized leverage trading platform deployed on Osmosis since July of 2023. It allows traders to engage in leverage trading across various crypto assets while ensuring solvency through its uniquely designed perps system.Trade on Levana’s OSMO market here:
Read more about the Levana design here: Introduction to Levana Perps v2. TLDR: Levana Perps is awesome and has a… | by Levana Dragon Rider | Levana Protocol | Medium
Read and watch more about Levana’s growth since launch here:
Fee Analysis - https://twitter.com/ario_57_/status/1707023000040575092
User retention - https://twitter.com/Abbas_ra21/status/1707324929501180323
Trader Behavior - https :// twitter. com/Abbas_ra21/status/1706986083018293693
Scaling Perps - http s: // x. com/Cryptodreams8/status/1707710200126284255?s=20
Open interest analysis - https :// x. com/ario_57_/status/1708173902013194452?s=20
General Performance Overview - http s://twitter.com/ario_57_/status/1706355915350217049
Youtube Interview with Jack Zampolin - https ://www.youtube.com/watch?v=8F5fRMBw990
MetaMask Snaps Spaces - http s://x.com/Mystic_Labs_/status/1707062448203726895?s=20
Interview with The Interop - http s://twitter.com/TheInterop/status/1707748120573219139
Levana’s Metrics on Osmosis to Date
In December 2023, Levana launched the Levana governance token (LVN), which will be used to drive ecosystem adoption, incentives and security of the network.
This loanswap is designed to get a huge chunk of Levana tokens into the hands of the Osmosis community