GRO Liquidity Partnership Overview

Edited on 16th November 2021 to reflect changes made in follow-up conversations with partners, the Olympus Pro Snapshot vote, and the Tokemak C.o.R.E.2 outcome.

Gro DAO tokens (GRO) have $20M liquidity ($34M total pool liquidity) across Uniswap v2 and Balancer in GRO/USDC, GRO/GVT, GRO/WETH, and GRO/PWRD pairs. The daily trading volume is now at ~$3.2M across these pools.

The community has provided feedback that the current liquidity level could be deepened to ensure price stability. This would allow larger transactions to take place without causing unnecessary jump in token prices. At the same time, a deeper liquidity would also improve user experience as the slippage or price impact would become smaller for each trade.

In response to that, the Gro team has been in discussion with following protocols about options to deepen liquidity for GRO.

  1. Fei Protocol (FEI-Ondo LaaS) - Monday 22nd Nov
  2. Visor Finance (HyperVisor) - Monday 22nd Nov
  3. Tokemak (Reactor) - we’ll try again in C.o.R.E.3
  4. OlympusDAO (Olympus Pro) - Friday 19th Nov

While Gro DAO could seed liquidity directly with its treasury funds, it would be a capital-intensive exercise where Gro DAO treasury would need to supply both GRO and the paired token (typically ETH or stablecoins) to the pools, which would reduce treasury resources available in supporting protocol growth initiatives. Partnering with other protocols to solve this problem would also build bridges between Gro and other valuable members in DeFi, making Gro more widely known to other communities.

Providing liquidity through the first three partnerships above are in line with Vote 2B, which authorised the Gro DAO multi-sig to initialise and contribute liquidity to various pools, and do not require an additional DAO vote to proceed. However, the last option (Olympus Pro) works differently and thus we have proceeded with a DAO vote - please see more details below.

#1: Fei Protocol - FEI-Ondo LaaS

Fei Protocol has partnered with Ondo Finance to offer a Liquidity-as-a-Service (LaaS) solution for DAOs to deepen liquidity through pairing their tokens with FEI stablecoin. Gro DAO can deposit GRO tokens into an Ondo liquidity vault where Fei Protocol will match our deposit with an equivalent amount of FEI. The tokens will then be used to bring liquidity onto Uniswap v2 - it would not only deepen liquidity for GRO but also tap into the existing FEI trading pairs to make trading GRO with other tokens more easily.

@Andrew_l_CL has elaborated on this solution in this community post. We would go ahead with the proposal to seed $5M GRO tokens that will be matched by Fei. Note that Fei has increased the fixed APY from 2% to 5% on the $5M FEI tokens provided to the pool, which would be more than offset by the TRIBE incentives allocated to the GRO/FEI pool in the first 3 months at 10k TRIBE/week per million dollars of GRO deposited.

Gro has signed up to be part of the launch group that will start next week (w/c 15th Nov). The $5M GRO tokens will be allocated in 2 batches. The first batch will be allocated to a 3-month vault that will be set up this week and could be rolled over when it expires. As the vault rolls over, the exact number of tokens in the vault will be reset based on the token price at that time. The second batch will be allocated in 6-8 weeks’ time after the launch of the 3-month vault as Ondo launches perpetual vaults. We expect the 3-month vault and perpetual vault to overlap with each other for 4-6 weeks.

After the creation of the Uniswap v2 pool, users holding GRO and FEI can also add liquidity into this pool. Users can start depositing FEI/GRO into the Ondo vault once the perpetual vault is up and running, with the option to stake GRO/FEI LP tokens for TRIBE rewards. Fei Protocol has committed to 10k TRIBE per week per $1M deposited in the first 3 months.

#2: Visor Finance - HyperVisor

Visor Finance offers active liquidity management on Uniswap v3 where it requires less capital to achieve the same slippage seen in other AMMs. With this partnership, Gro DAO can seed GRO and WETH tokens on Uniswap v3 where Visor will manage the liquidity positions to ensure they are ‘in-range’ while maximising capital efficiency.

Visor’s simulation suggests that Gro DAO can achieve lower GRO/WETH slippage on Uniswap v3 than on Uniswap v2 by seeding $800k GRO and $200k WETH (80/20 arrangement is the same as what we have for Balancer vault now). Fees earned from providing liquidity will be re-invested under Visor’s management; the resulting APY varies across pairs and can be viewed on Visor’s dashboard. In return for the active management service, Visor takes 10% of the fees earned.

We would like to go ahead with this proposal with a total of $1M allocation (80/20 between GRO and WETH). With this program, Gro DAO members will see deeper GRO liquidity on Uniswap v3, which would provide a more pleasant trading environment with lower slippage.

#3: Tokemak - Reactor

Tokemak provides reactors where liquidity providers can stake their governance tokens in return for TOKE; the governance tokens will then be directed to pair with another token (e.g., ETH or USDC) for trading on a weekly basis. These reactors are allocated based on votes won in Collateralization of Reactors Event (C.o.R.E.).

Gro was in the race for C.o.R.E.2 vote running from Nov 9-16 and got 980k votes, ranking 13th out of 45 contestants. Since Gro did not win a Top 5 position in C.o.R.E.2, we will need to wait for the next C.o.R.E. event for standing up a GRO reactor.

When a GRO reactor is stood up, there will be an opportunity for allocating up to $9M GRO liquidity to Tokemak Reactor. We believe some Gro DAO members may like to allocate part of their GRO balance to Tokemak reactor to diversify yields (18% to 191% APY in TOKE tokens based on other reactors), so the DAO treasury may not seed the full amount available.

#4: OlympusDAO - Olympus Pro

OlympusDAO launched Olympus Pro in September to facilitate protocol-owned liquidity. This program works differently from the others mentioned above – instead of seeding liquidity, DAOs offer their governance tokens at a discount to exchange for LP tokens from users. The LP tokens obtained would then be kept in the DAO treasury where they would earn trading income for the treasury balance while providing liquidity in the market. In return for providing the bond instrument and marketplace, OlympusDAO takes 3.3% of the bond payout value in our governance tokens.

Gro DAO passed the proposal to initiate an Olympus Pro bond to attract liquidity for the new GRO/PWRD liquidity pool on Uniswap v2 at a rate of $250K/month. This would serve as a pilot program for Gro Protocol to work with OlympusDAO to test market demand for GRO/PWRD bonds and how much discount is required to continuously deepen liquidity. There will be flexibility to scale the program up or down based on market demand.

Since this program buys rather than seeds liquidity, we initiated a DAO vote with a separate vote proposal on the community forum. As the vote was passed, Gro will initiate the bond on Friday 19th November as part of Olympus Pro’s Cohort 3. Please see the vote proposal here.

These programs will increase GRO liquidity to improve price stability and lower slippage for Gro DAO members. The partnerships will also deepen our relationship with other DeFi protocols while offering a wider range of incentives to GRO holders.

The above outlined the beginning of our liquidity partnership. If these programs prove successful, we will have the flexibility to ramp up our allocation to further increase liquidity in the market.

Please add your suggestions, objections and support in the comments below.


Should we choose only 1 partner or can we work with all?

Great overviews, excited about all of them. One thing I’d like to add is the addition of some kind of target metric that the team would like to aim for to measure the “success” of each programs and also in total. The community can vote, or at least be made aware of:

  • the suitability of the metric
  • the intensity of each e.g aim for $X million in collected fees in 3 months
  • other possible considerations like an acceptable success band e.g ± 5% from metric

Again, pumped for this!


I think these are interesting for GRO’s exposure / partnerships, but just wondering why we are so focused on liquidity pools whilst trading volume is tiny vs existing liquidity?

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Below 800k for today. Include GVT-GRO-USDC pools.

I think driving TVL is a higher priority for the protocol. Currently the protocol is paying for liquidity through the pools using GRO - these are GRO that could be used to incentivise TVL instead.

Setting up programs for GRO liquidity separately from incentivised first party pools allows GRO rewards to be directed towards TVL incentives instead.

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Makes sense! Thanks.

Planning to work with all of them with smaller allocation upfront and scale up/sunset programs based on how they work!