Summary
This is a proposal to claim the DAO’s FORTH/ETH liquidity from the Arrakis PALM vault and deploy it to a newly configured Charm vault. Any extra FORTH tokens would be returned to the DAO treasury.
Resources
- Original Proposal for Deployment to Arrakis PALM
- Public Arrakis V2 Vault - FORTH/wETH Dashboard
- Charm Alpha Vaults
Body
Arrakis PALM, Protocol Automated Liquidity Management, is a liquidity bootstrapping mechanism that taps into the organic trading volume on UniV3. PALM is designed to bootstrap liquidity by acquiring more base asset inventory without executing swaps directly.
The Forth DAO initially seeded a small amount of liquidity with an initial asset ratio of 95/5 in FORTH/ETH and later deposited more FORTH once the asset ratio had reached 60/40. The current ratio is 92/8, and is currently configured to have no bias towards rebalancing.
PALM charges platform fees of:
- 50% trade fees
- 1% AUM
It has been net positive 7.09% vs holding, net fees.
Charm Alpha Vaults are publicly accessible vaults that automatically manage user assets for LP positions on Uniswap v3. It creates new liquidity positions, so that the positions will not be out of range, and LPs will earn higher yields from concentrated liquidity.
Parameters derived from backtesting over 2 years of live swap data on the FORTH/WETH 1% pool, predict an APY of +15.5% vs Hold and provide 2.14x better liquidity vs full range. Backtesting does not ensure predicted results. However, backtesting on the SPOT pool shows predicted performance very close to actualized by the SPOT vault currently in use.
Charm Protocol charges 1% of trade fees + 4% trade fees for vault management.
The DAO may optionally take ownership of the management and receive that 4% instead–or configure it as desired.
Current DAO Holdings and Liquidity
Below is a snapshot of DAO controlled assets, as of November 19th, 2024. Please note that all of the data below is summarized in a best effort form, from publicly available sources on chain.
| DAO Assets | Balance | Value |
|---|---|---|
| AMPL | 11,586,213.97 | $14,019,318.90 |
| WAMPL | 13,667.131538877959 | $ 211,567.20 |
| FORTH | 1,850,559.89 | $6,236,386.83 |
| GRT | 47,500.1 | $11,092.94 |
| SPOT | 4,733.56 | $6,295.63 |
| USDC | 4,391.62 | $4,391.62 |
| Total | $20,489,053.12 |
| Liquidity Positions | Balance | Value |
|---|---|---|
| ETH/AMPL UniV2 | 0.07746149151 | $1,475,273.57 |
| WETH/WAMPL Charm (UniV3) | 36723.063499546011236536 | $1,250,000 |
| stAMPL | 144.5633359 | $628,281.6731 |
| SPOT/AMPL Poolside | 0.0000280312168 | $228,004.34 |
| Arrakis PALM (92% FORTH / 8% ETH) | N/A | $3.12M |
| Bill Broker (SPOT/USDC) | 433,597,593,092.88 | $554,437.73 |
| Total | $7,255,997.31 |
Summary
Maximizing the effectiveness of DAO liquidity can both better the ecosystem for all participants, and ensure healthy return on DAO assets to ensure long term success.