Abstract - StellaSwap is seeking financial support for the next 6M to continue serving the ecosystem.
Motivation - StellaSwap has payed a critical role for the Moonbeam ecosystem since inception, and we’re keen to ensure we can continue serving the community as we restructure
Rationale - StellaSwap is on the verge of running out of funds by the end of this month. Here’s the reasons that contributed to the reduction of our treasury (as per the meeting);
General market conditions, with DOT price at an all-time low
Significant reduction in DeFi activity on Polkadot, resulting in reduced revenue from trading fees
Close to $1M in runway expanded throughout the 4 years we’re operational
In the middle of the year, we calculated that we’ve got two months of runway left. Therefore, we went into survival mode and did the following;
Transited to a new serverless infra (GCP) in order to slash infra costs by 66%-75%
Reduced salaries for the team, with 4 core members not paid until now
Executed multichain expansion via a DEX on Monad to boost treasury and diversify
However, the new DEX didn’t perform as well as we expected as general DeFi activity on Monad was underwhelming. As that did not work out, we’ve reached out to Moonbeam foundation for next steps.
Hey @Az_StellaSwapCD,
thank you for submitting this proposal. We are currently reviewing and discussing it and will get back to you shortly. We appreciate your patience.
Kind regards,
Yaron
I apologize for the delay. “Shortly” didn’t end up meaning shortly from the outside perspective.
We’ve been discussing this proposal in great detail as Stellaswap’s icome statement and path back towards sustainability is a rather complex matter. To have a much more efficient exchange, we’ve created a dedicated group with StellaSwap to work through these specifics. We should have communicated this update sooner.
Thank you for your patience and for holding us accountable. We’ll make sure to keep you updated on our progress moving forward.
Hello @_yrn , as I see you are discussing a path towards sustainability with the StellaSwap team.
I would like to add to that a fidelity program is necessary to achieve such metric. When the DOT rewards were plentiful StellaSwap had more than 10M TVL then when the rewards diminished you have the current 2.65M TVL on the protocol. The DEX only attracted yield hunters and once the rewards were gone they were gone with them. The reason a second bounty proposal on the Polkadot Treasury was rejected was because StellaSwap was unable to retain TVL.
It is necessary for StellaSwap to create a fidelity program where LPers who have been years with StellaSwap get a boost on rewards, to promote small LPers to avoid centralization since big LPers take their big TVL and rewards with them while small LPers stay on the protocol, also reward LPers who contribute to many different pools and are active most of the time, also give a boost for those LPers who keep addying money consistently into their positions on a monthly basis, also give a boost to those LPers who reinvest their rewards in either the protocol token or in increasing their TVL position size in the pool that they are LPing; all of this will give resilience to StellaSwap otherwise any help or rewards will go to yield hunters and TVL won’t remain in the protocol.
The problem StellaSwap currently faces is the lack of a fidelity program to retain value in the protocol, just treasury bounties to the protocol without a strategy won’t retain value and now we have the current situation as an example.
There are those of us that despite all still support the protocol and are still LPing.
