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Proposal #890

Reposition and Reallocate stOSMO Support Liquidity

PassedTransfer Positions

Passed on 15 Jan 2025 with 93.8% of the votes for yes.

Yes

93.8%

99.7% without abstain

Veto

0.3%

of votes cast

Ended

15 Jan 2025

The ballotvotes cast · final tally
Yes

93.77%

of votes cast

Abstain

5.95%

of votes cast

No

0.01%

of votes cast

Veto

0.27%

of votes cast

This proposal aims to re-deploy the stOSMO/OSMO static liquidity position as the position is now out of bounds.

Background

The goal of Liquid Staking Token (LST) support initiatives is to allow OSMO to become a more flexible token for use across DeFi while holding to the principles of:

  1. Minimal OSMO staked using Protocol Liquidity.
  2. Diversity of OSMO LSTs.
  3. Resilient Pegs for OSMO LSTs.

Current Deployment

stOSMO support is currently deployed as follows:

  • Static position

    • 1.24 - 1.31 of ~12m OSMO

  • Locust Vault - 900k

    • 200k OSMO from [Hidden link]
    • 700k OSMO + 2.643 stOSMO from [Hidden link]
    • This position is almost entirely composed of OSMO, with a small buy side of stOSMO present.

Proposed Deployment

Margined Vault - 3m OSMO (+2.1m)

  • As seen on the Concentrated liquidity display, the Margined Locust vault provides a depth of around 3x compared to the existing static pool while utilizing only 900k OSMO Liquidity.
  • Increasing this deployment to 3m OSMO should provide a similar depth as the previously in-range liquidity position, which moves along with the market rate.
  • Any stOSMO will also be added to this position to allow disposal for OSMO and provide buy side inventory.

image|690x339

Static position - 9.9m (-2.1m)

  • To be redeployed as a backstop for the stOSMO peg
  • This position will no longer contain any stOSMO and the community pool should not stake more OSMO in line with the first principle above.
  • This position will be redeployed into a narrower banding of 1.3 - 1.32, or market price at deployment, to act as a backstop for stOSMO liquidity.
  • This proposal does not ask for this to be downsized, as the sizing is required to maintain the current Mars stOSMO caps until the implementation of CL pool depth into the Mars model is completed.

Implementation

This proposal transfers the community pool liquidity position and accumulated stOSMO to the [Hidden link] which will execute the proposed adjustments to the liquidity.

Execution will be performed in several stages to ensure that sufficient liquidity remains in the pool during migration.

  • Withdrawal of 2.1m OSMO from the position and collection of accumulated fees.
  • Deposit of all stOSMO (~1.8k) and 2.1m OSMO into the Margined vault, establishing similar depth.
  • Withdrawal of half the remaining OSMO from the position.
  • Deposit into the new range.
  • Withdrawal of the remaining OSMO from the position.
  • Deposit into the new range.
  • Return of the liquidity position and the vault receipt tokens to the community pool.

Forum Thread: [Hidden link]

Timeline

  1. Submitted10 Jan 2025
  2. Voting started10 Jan 2025
  3. Voting ended15 Jan 2025
  4. Deposit deadline24 Jan 2025

Proposer

Address
osmo19w2…3hfq0r
Deposit1.6K

Rules

Not recorded for this proposal.