Authors
Core Team
Summary
This proposal suggests reallocating 25 PUNK tokens, which are currently out of range on Uniswap V3, to be directed towards a PUNK/MILADY concentrated range. This entails configuring the settings to move from the current (i.e. 11:1) ratio of MILADY to PUNK to a final 1:1 ratio, effectively suggesting that MILADY may surpass PUNK in ratio. The proposal highlights the advantages of this move in the current bear market and its other side effects.
Rationale
Over the past year or two, market conditions for the entire NFT sector have been rather bearish. However, the Milady Maker collection (represented and backed 1:1 by MILADY tokens on NFTX) have demonstrated resilience and community growth, in contrast to the overall NFT market trends. Meanwhile, PUNK tokens (backed 1:1 by CryptoPunks) retain their status as the OG NFT collection, remaining valuable and losing much less steam in terms of value and community growth than other newer collections such as BAYC or Azuki.
The current meme of “Milady flips [insert any popular NFT collection]” has gained significant traction on social, serving as an effective viral marketing tool for the collection itself. Playing an active role in this would get NFTX more exposure/visibility, as the “end goal” of this meme inherently is to flip CryptoPunks. Aside from this exposure, adding a concentrated range on the PUNK/MILADY pair would reduce the spreads of both the MILADY and PUNK vaults, adding value to NFTX functionalities and making the vaults more viable to be integrated on other NFTfi products.
Lastly, with this proposal, the DAO would gain exposure to the potential scenario of MILADY tokens surpassing PUNK tokens in value. If this flip were to happen, the NFTX DAO treasury would benefit through reallocation, lowering CryptoPunks allocation, and increasing Milady allocation. If not, the balance of PUNKs remains the same.
Effects
Pros
- Lower spreads on MILADY and PUNK vaults
- Additional exposure for NFTX vaults by supporting the Milady community
- Increasing chances to have MILADY & PUNK vaults being integrated on other DeFi/NFTfi products by increasing on-chain liquidity of both collections
Cons:
- Creating this concentrated range might theoretically increase sell pressure on MILADY tokens due to additional selling pressure arising from the pair with PUNK tokens. This may lead to CryptoPunk holders using the PUNK MILADY >MILADY/ETH pool as additional liquidity to sell CryptoPunks. The impact of this on the MILADY token’s value and ecosystem should be thoroughly assessed with the Milady community before implementation.
Specifications
This proposal entails reallocating 25 out-of-range PUNK tokens towards a PUNK/MILADY concentrated range. The new range configuration will shift from the current 11:1 MILADY to PUNK ratio to a 1:1 ratio.
Funding request - Yes
The proposal moves 25 PUNK tokens from Uniswap V3 into a new PUNK/MILADY concentrated range.
Proposed points of discussion.
- What are the potential negative effects, including potential increased sell pressure on MILADY tokens?
- If proposal passes, in which fashion will liquidity be rolled out (i.e. DCA?)
Quorum (For forum)
Minimum Quorum: At least 5 votes
Passing Threshold: More than 50% must vote in agreement for the proposal to Pass. For changes that significantly impact token ratios or allocation, more than 70% must vote in agreement for the proposal to pass.
- Yes, execute plan
- No