PoolHAUS Season 2
What? PoolHAUS is evolving!
aka The Muppets Take Mainnet
tldr;
PoolHAUS LP DAO had a great first season on xDai. For PoolHAUS Season 2 we’re proposing to migrate the LP DAO from xDai onto Ethereum mainnet. Moving to mainnet gives us two benefits for the LP DAO, HAUS, and (ultimately) DAOhaus:
- A mainnet pool will be open to a wider audience of investors with deep ETH pockets
- We can take advantage of the Balancer Liquidity Bootstrapping Pool (LBP) to support significantly more liquidity for the same amount of HAUS and ETH compared to the 50/50 pools currently available on xDai.
Inspiration and Validation: the iRobot Success Story
A few months ago DAOhaus ran an experiment with MetaFactory to launch a mainnet LP DAO called iROBOT. Here’s how that worked:
- ROBOT had an already existing ROBOT/ETH pool on mainnet
- iROBOT launched a Balancer LBP pool with an initial weight of 99:1 ETH:ROBOT which shifted over 3 months to a 30:70 ETH:ROBOT pool.
- The initial liquidity balance of $4MM ETH and $40k ROBOT in the 99:1 pool was transmuted to a 30:70 ETH:ROBOT pool with $1.2MM ETH and $2.8MM ROBOT.
Could this work for PoolHAUS?
The success of iRobot LP DAO led us to wonder if we could apply the same strategy to PoolHAUS, which raised a few questions:
- What would happen if we used this strategy without an already existing pool to trade against? (or one where the pool to trade against had heavily reduced liquidity?)
- Existing liquidity pool is on xDai and has ~$1MM of liquidity, which is 50:50 ETH:HAUS ($500k each). 80% of this liquidity is controlled by PoolHAUS DAO.
- What would happen if PoolHAUS DAO removed its liquidity ($400k HAUS, $400k ETH) from the xDai pool and used it to create a new changing weight pool on mainnet, starting 99:1 ETH:HAUS ($400k ETH:$4k HAUS), which would gradually change to a 30:70 ETH:HAUS ($121k ETH:$283k HAUS)?
- This would create some amount of cross-chain arbitrage between xDai pools and mainnet pools. There will be significantly less liquidity left on xDai pools, because we will take ~$800k liquidity, leaving ~$200k on xDai DEXs.
This could work for PoolHAUS
Here is the proposed strategy for launching a similar program for PoolHAUS:
- In Q1 2022, we summon a mainnet PoolHAUS DAO to conduct the experiment. xDai PoolHAUS DAO members who stay in the DAO to roll over their liquidity into the mainnet DAO will receive a HAUS bonus as a reward for continuity (exact figures TBD).
- Mainnet PoolHAUS DAO sets an open period to raise ETH from new contributors. Continuing PoolHAUS members will automatically gain membership in the mainnet DAO and new members can join during this time. Even if we can solicit a small amount of additional ETH, it will help the experiment succeed by increasing the buying pressure on HAUS through the changning weight pool.
- The expected result is that this will effectively increase the price of HAUS in ETH over the time period, unless significantly more HAUS is added to the pool.
- The key difference between this experiment and iROBOT is that almost no prior liquidity exists on mainnet, so it’s expected to generate natural price discovery as arbitrageurs will have to bridge HAUS from xDai to mainnet in order to sell into the pool.
- Criteria for success:
| Criterion | Metric |
|---|---|
| creation of significant liquidity on mainnet | WETH:HAUS TVL on Balancer (denominated in Ξ) |
| create buy pressure for HAUS | HAUS price on mainnet and xDai (denominated in Ξ) |
| increase visibility for the HAUS token | # of addresses holding HAUS +/- WETH-HAUS Balancer LP tokens (B-30WETH-70HAUS) |
Next Steps:
| # | Step | status |
|---|---|---|
| 1 | Done! | |
| 2 | Done! Ragequit window is open right now. | |
| 3 | Communicate the strategy for PoolHAUS SZN2 with PoolHAUS and wider DAOhaus DAO + community. If you’re not into it, now’s the time to move along : ) | In Progress |
| 4 | Implement strategy to exit current LP tokens and bridge HAUS & ETH to mainnet. This can be executed from the PoolHAUS DAO minion. | Q1 2022 |
| 5 | Make an open call for new contributors to join mainnet PoolHAUS DAO, allowing new ETH to flow in | Q1 2022 |
| 6 | Once on mainnet, DAO deploys a 99:1 > 30:70 Pool of ETH:HAUS, changes over an arbitrary time period (3 months) | Q1 - Q2 2022 |