Allocate XPRT Incentives to bootstrap deeper XPRT liquidity

Context

XPRT was one of the first IBC-enabled assets to go live in the Cosmos ecosystem (1 April 2021) and among the first 10 Cosmos ecosystem assets listed on Osmosis. Prior to what happened on Terra USD (UST), XPRT was sufficiently liquid on DEXes such as Osmosis, but that is not the case anymore, which causes high slippage.

XPRT is the staking token of the Persistence Core-1 chain that secures the chain and, as a byproduct, the products built on top of the Core-1 chain. The low liquidity of XPRT leaves it vulnerable to attack vectors, which may directly affect the security of the Core-1 chain.

Over the last 12 months, the teams building on Persistence have been aggressively pushing to roll out secure and robust products, focusing on building strong teams and strong product mechanisms. With pSTAKE’s module now successfully live on the Core-1 chain and the imminent rollout of Dexter v1 on Core-1, it becomes crucial for all the users of Core-1 chain products and XPRT stakers to bootstrap deep liquidity of XPRT on Decentralised exchanges once again.

The current liquidity of XPRT on Decentralised Exchanges in Cosmos is less than ~k USD at current prices. This needs to change to ensure a strong and secure chain.

Proposal

In order to bootstrap XPRT liquidity, this proposal suggests to start by focusing on DEXes within the Cosmos ecosystem. Since its inception, Osmosis has been a dominant DEX within Cosmos while Dexter, which is a DEX focussed on yield-generating assets (such as Liquid Staked Tokens: stkATOM, etc.) is going live on the Core-1 chain by the end of March 2023.

This proposal requests the allocation of 1M XPRT from the Ecosystem wallet held by the Persistence Foundation (see tokenomics) for incentivizing liquidity for XPRT pairs on Osmosis and Dexter for a duration of 3 to 6 months. Assuming this proposal passes, a discussion platform will be created to discuss the allocation of the incentives with the community, before putting it up for further governance proposals on chain.

Given the high staking rewards for XPRT, a potential barrier exists for XPRT holders to supply liquidity on DEXes (LP rewards should ideally be higher than staking rewards for it to make economic sense for token holders to supply liquidity). This problem will be resolved with the upcoming launch of stkXPRT on which the pSTAKE team is working on.

On the passing of this proposal, the Persistence foundation will transfer 1M XPRT from The Ecosystem wallet (persistence1lcaqzpl36q4mehf7zv969wejcrrkypcnwk2d75) to a new so-called ‘Persistence Incentivisation Multisig’ (persistence1zlc6d8nr2uwqym32mk7pqv2k7qjkwlcm6vfh29).

All spending from the Persistence Incentivisation Multisig will be subject to approval through on-chain governance, following prior discussions within the community.

This Persistence Incentivisation Multisig will be managed by the following members & stakeholders from the Persistence Ecosystem:

1. Jeroen Develter (Core-1 Lead)
2. Pratyaksh Inani (Dexter Lead)
3. Mikhil Pandey (pSTAKE Lead)

All transactions from the Persistence Incentivisation Multisig will of course be publicly visible for transparency.

Conclusion

This proposal suggests the allocation of 1M XPRT from the Ecosystem Wallet to focus on bootstrapping the liquidity of XPRT on DEXes within the Cosmos ecosystem to the benefit of the entire Persistence Ecosystem. By voting YES, you agree to allocate 1M XPRT from the Persistence Ecosystem Wallet to the Persistence Incentivisation Multisig.

By voting NO, you disagree to allocate 1M XPRT from the Persistence Ecosystem Wallet to the Persistence Incentivisation Multisig.

By voting NO WITH VETO, you think this is a SPAM proposal and the creator of the proposal should lose their deposit.

By voting ABSTAIN, you choose not to participate in the voting of this proposal, however contribute to the quorum.