PHUB 003: Building PHUB/BTCB Liquidity Pool Governance Vote

We’re launching a governance vote proposing 45% of the revenue currently used for PHUB buy backs is redirected to building PHUB liquidity. Further detail is below.

You’ll find the vote here

Please do let us know your thoughts and/or questions on the proposal. As with all governance votes, there will be a 24 hour period between the voting snapshot being taken (this will happen shortly after this post) and the voting window beginning. The vote will be open to all PHUB holders for 24 hours between 16-17 August 2022.

Summary

PHUB is the Peg Hub ecosystem’s revenue-sharing & governance token. The developer allocations from all our protocols have been repurposed to benefit our PHUB holders through automatically buying back tokens on the open market and redistributing those PHUB tokens to those staking in our PHUB autovault.

We’ve seen strong price appreciation since PHUB’s launch in June. However, liquidity has remained low ($72k at the time of writing) meaning reasonably small trades can have large price impacts. This is because although the PHUB/BTCB liquidity pool offers strong returns, it’s not been a popular choice due to the fact that as PHUB appreciates, it’s naturally sold to BTCB to keep the pair balanced. With PHUB being such a scarce asset it’s understandable that many simply don’t want to give up any of their tokens.

We’re therefore initiating a governance vote to propose redirecting 45% of the funds currently used for buybacks to instead be used to build the PHUB/BTCB liquidity pool. Our long-term target is to reach a 1:10 liquidity to market cap ratio, but we’re proposing the 45% liquidity building allocation would remain until a 0.5:10 ratio is achieved. We’d then re-evaluate the liquidity building allocation.

With our expansion to 4 new chains in 2022 and more to come in 2023, we expect to significantly increase protocol revenue and therefore, now feels like the right time to propose this change.

In summary, currently 100% of revenue is being used to buyback PHUB and deliver as staking rewards.

The proposed would use 45% to add liquidity (22.5% buying PHUB, 22.5% buying BTCB), with the remaining 55% still buying PHUB for staker rewards.

1 Like