RFC #1 Proposal for Wagmi DAO and Kava Partnership
Title: Launching Wagmi DAO’s DeFi Products on Kava EVM
Proposal Overview
This proposal aims to formalize a strategic partnership between Wagmi DAO and Kava. The main objective is to launch Wagmi DAO’s suite of DeFi products on the Kava EVM, providing new utilities and avenues for growth for both entities.
Terms of the Agreement
Investment and Token Swap
• Kava Labs will provide Wagmi DAO with $2 million worth of KAVA tokens priced at 69 cents per token.
• In return, Wagmi DAO will provide Kava Labs with $2 million worth of WAGMI tokens, priced at 1 cent per token.
Liquidity Provision
• Kava Labs agrees to lock $2 million worth of WAGMI in their treasury
• The remaining WAGMI tokens received by Kava can be used to provide liquidity in liquidity pools of their choice.
• Wagmi DAO agrees to provide $2 million worth of Kava tokens into Wagmi - Kava WLP and lock them into GMI and distributes the fees among GMI participants.
Benefits
• For Wagmi DAO: Access to Kava’s ecosystem and a liquidity boost to facilitate GMI growth.
• For Kava: Integration of innovative DeFi products and diversification of the Kava EVM platform.
Timeline
Token Swap Completion: Within 1 day, upon governance votes completion of KAVA and WAGMI DAO
Wagmi DAO DeFi Products Launch: Within 3 days post-token swap
Liquidity Provision: Within 1 day post launch of WAGMI
Decision Making
This proposal will be open for voting by the governance tokens holders of Wagmi DAO. A majority will be required for the proposal to pass.
TL;DR
Wagmi DAO and Kava will engage in a strategic partnership. Kava will invest $2M in Wagmi DAO by buying WAGMI tokens at 1 cent, and Wagmi DAO will buy $2M of KAVA tokens at 69 cents. WAGMI DAO commits liquidity to GMI contract and distributes the fees among GMI participants. The partnership aims to grow both ecosystems by launching Wagmi DAO’s DeFi products on Kava’s EVM.
Edit 1: - upon request of Kava, changed proposal:
Renamed Kava Labs to Kava
Removed Kava BD will help listing of Wagmi token on centralised exchanges
Can someone whose good at budgets explain to me why we are giving $wagmi at a 50% discount to receive $kava at a 15% premium?? The upside here is this project launches on a ghost chain with no active users/liquidity??? What am I missing here
Also assuming
“• Kava Labs agrees to lock $2 million worth of WAGMI in their treasury”
This is at market price?
Whereas,
“• In return, Wagmi DAO will provide Kava Labs with $2 million worth of WAGMI tokens, priced at 1 cent per token.” this has price mentioned at ICE = 0.69$ or WAGMI = 0.01$
Need to review the discount for wagmi. At the beginning they will have 200m wagmi which at the moment ( ice $1,7) is $4.6m and they only have to block $2m of it, it is too much.
Need clearer guidance on possible unlocking of tokens ect…
I think an initial Launch on the Ethereum Mainnet would benefit the Project the most by capturing more attention.
Liquidity is currently spread fairly thin and people arent really willing to go out of their way to bridge to new chains as much as they would be during a bull run. “Price go up” remains the best advertisement a project can have, the amount we can raise is likely far greater on ETH.
I must express my reservations regarding the proposal to launch on KAVA. My concerns span across multiple facets including its user base, developer ecosystem, and TVL metrics, which seem suboptimal at best. I’m genuinely concerned that committing a major portion of Wagmi’s liquidity to KAVA might stifle Wagmi’s broader potential. From what I can assess, the current ecosystem on KAVA doesn’t offer the kind of robust integration opportunities for Wagmi, particularly from a composability angle.
Many on-chain crypto participants dismiss a protocol simply because it’s tethered to a chain they’re unfamiliar with. Although I’m aware of WAGMI’s aspirations to be multichain, I’m convinced that our initial strategic thrust should be to anchor the bulk of Wagmi’s liquidity on a chain with a more significant TVL. Navigating a low TVL chain for arbitrage seems a daunting task and not the most user-friendly approach. Given Kava’s relatively limited reach and user base, the aftermath might be reduced trading volumes and potentially low GMI APRs, deterring active deposits in GMI.
Another point that puzzles me is the involvement of the Kava Foundation. A grassroots approach, such as considering a GMI bond for WAGMI LP that our own community could back, feels more intrinsic and sustainable. Furthermore, we always retain the option to introduce a GMI bond for WAGMI - KAVA later, letting us pivot based on the evolving needs and sentiments of our community.
Also, the notion of the Kava Foundation securing a 50% discount on WAGMI even before liquidity is deployed feels quite perplexing. While I acknowledge the TWAP of WAGMI was considered, such a hefty discount still seems excessive and not in the best interest of the broader community. While the allure of becoming a dapp on Kava might resonate with some, I see it as a significant risk, one that we should approach with caution.
To cap it off, if you’ve read the proposal and find that the main allure of this proposal is a CEX listing, I’d stress that solidifying our presence on a chain with strong activity would vastly amplify our token’s value trajectory — much more than a spot on a T2 or T3 CEX. On-chain trading volume for WAGMI is also important for the health of the protocol. More liquidity on chain means more fees channeled to GMI.
Wrapping up, while the idea of joining forces with KAVA might have its merits, deeper introspection hints that aligning with a more dominant and engaged chain would serve Wagmi’s long-term aspirations more effectively.
If we can negotiate on a Deal with Kava that lets us Launch on both Chains at the same time with a good Chunk of Liquidity allocated to both chains i am in support of this proposal but only if said condition is met.
renegotiate the deal: $2m kava for $2m wagmi. no discounts. Also would like to see more incentive from the kava fund. if not its not worth to launch on kava compared to other more active chains where we could capture more volume which would result in more fees for WAGMI.
I agree with launching on Kava and leverage their on chain incentive program that pays out protocols.
It sounds like you have major backing and support of the Kava team and ecosystem. I think this could be helpful. Not to mention you can have assets like ATOM natively on Kava unlike other EVMs.
Also, a $0.69 ICE swap for $0.69 KAVA swap is bullish in my froggish opinion. May the frog gods look kindly upon us.
ICE was literally $0.69 3 days ago, and around there for the last month lol. I support 100%.
i was inclined to be in favor but fwiw i think the bagel lays out incredibly good points about the risks of getting marginalized on a chain that requires less conventional bridging to get to. If we go for it, I definitely think $2M for $2M market value at the time protocol liquidity is added would be a more fair exchange. KAVA is getting more value out of this than we are, and the token values exchanged need to better reflect that especially considering this won’t be a heavy inflationary protocol. I also think we would want significant assurances that ALL WAGMI tokens provided would be locked for 1 year+ to make sure the impact of them receiving these tokens is more likely to have a positive than negative effect on price.
By way of an introduction, I am Joseph, current core contributor at dYdX, Enforcer @dYdXOpsSubDAO and a member of the TraderJoe Governance Council.
I’d like to express my approval of the proposal (in principle) as explained herein but would like to see a bit more detail put into this (and future) proposals moving forward so that the community is well aware of who the parties are, and what the full terms of this partnership agreement will actually entail.
Some minor questions and comments from my end (some reflected from comments made by other community members):
Who will be the entities that will be parties to this agreement?
I must express my reservations in relation to the KAVA Foundation obtaining a 50% discount for WAGMI. This seems a bit excessive to me. In my opinion, the ‘deal’ should be structured in a manner that incentivises the KAVA Foundation to deliver on the obligations as set out in the partnership. For example, a higher % of discounted WAGMI (capped at 50%) is unlocked when a certain % of TVL is achieved / when a certain amount of exchange listings have actually taken place. These quantifiable metrics will naturally help to instill confidence. Albeit being aware that the initial intention here is to have readily available liquidity on KAVA, A 50% discount is (in my opinion), a bit excessive. Setting some performance metrics is a good idea to structure this as, at the end of the day, KAVA’s TVL is low in comparison to other chains.
Let’s also keep in mind that exchange listings are highly dependent on obtaining a legal opinion stating that WAGMI is not a financial instrument (or term equivalent) in the relevant jurisdiction. Will KAVA be covering the costs for listing (both legal, and CEX-specific)?
