[DAO:339e3dc] Deposit up to 50% of DAO's Ethereum into MANA LPs

by 0x8b257b97c0e07e527b073b6513ba8ea659279b61 (Morph)


Deposit up to 50% (170 Ethereum) of the current eth (340) held by the DAO paired with mana into decentralized exchange LPs in the polygon and ethereum network. (TBD exactly which networks/exchanges within the draft process discussion)


A key component of any decentralized economy is liquidity depth; without decentralized exchange liquidity, many people lose access to the DCL economy or are unfairly punished via high slippage despite using the decentralized system as intended.

By providing a sustainable and permanent liquidity well, the DCL DAO will earn a native Eth & mana income to strengthen the economy, while also reducing the total slippage as we sell MANA for grants - protecting our treasury as less price depreciation occurs and reducing overall fee-extraction (sandwich bots/CEX arbitrage etc.).


I would recommend placing the mana/eth into the following LPs - this is up for debate:
50% Uniswap on Eth mainnet
40% Quickswap on Polygon ZK network
10% Quickswap on polygon PoS network

On Fees:

Fees will become a crucial income for two reasons, the first is that they will accrue both in eth and in mana, enabling us to grow the LP further for free - or to accrue Eth/Mana for the treasury itself.

On Impermanent Loss:

Impermanent loss is the event where simply holding the tokens provided to the LP long term (Eth & Mana) would provide a better USD return even after accounting for fees due to the changing price ratios. This may occur and is entirely dependent on market activity.

I really see there being two core outcomes on a spectrum here:

If we continue to succeed, and mana at the least can retain a majority of its value from here, or hopefully, increase in market cap relative to Eth, then we stand to gain great value overall from fees as well as increasing our ratio of Eth available in the LP that can fund the DAO without solely relying on mana’s liquidity.

In the opposite case that Mana goes down from here, or that eth greatly appreciates in value vs mana, we are likely to suffer losses from our overall treasury value, in which case securing long term yield that does not rely on vesting/market-activity as well as rebuilding the MANA treasury is an equally beneficial use case, the risk of IL is not zero, but we are heavily weighted to betting on ourselves, and at the least, providing a permanent liquidity net that earns us a diverse income.

This makes a complex discussion of IL a weighted argument, even in a scenario where we lose market value and suffer from IL in lost eth, we have at least captured more fees and a return of mana to the DAO long term should we at any point succeed again.

On Execution:

The current multi-sig signers should feel comfortable with a one-time LP deposit into well-known and reputable decentralized exchanges - as this does not require selling any MANA on the open market, we do not need to worry about speculation and execution strategy on conversions. The multi-sig signers themselves should feel free to address this directly if necessary or if it is considered not a feasible request of their duties.

Closing Thoughts:

I believe the DAO has a fiduciary duty to provide a LP that the community can rely on, we stand to benefit in multiple ways and it would provide a healthy function that strengthens both mana and the DAO. Even should IL occur, the net benefit to the overall economy in the long term can be appreciated should we at any point succeed as a metaverse ecosystem - in any outcome, we will either end up with more mana, or more eth - earning an income in both along the way with a positive impact on mana price.

  • Convert 0% of the Ethereum held
  • Convert 10% of the Ethereum held
  • Convert 25% of the Ethereum held
  • Convert 50% of the Ethereum held
  • Invalid question/options

Vote on this proposal on the Decentraland DAO

View this proposal on Snapshot

Check out our other financial proposal about staking the other half of this Eth here:

I think we should consider gradually getting it to 50%. Voting for 10% as a starting point, & increasing it as we assess the yield (can be over a span of 2-3 months).

Im conservative when it comes to risk:D


Will we be diversifying into various liquidity pools?

Are there any risks other than IL that you foresee happening, even if remote, such as vulnerability or a breach.

Pardon me for my lack of understanding on this topic, but also, if we do deposit our ETH to such LPs, does it effectively mean we are indirectly converting our ETH to MANA?

Thanks for any clarifications.

As noted in the opening line, the eth will be paired with Mana before being put in the pool.

We will create a direct path for people converting ETH to MANA (or opposite).
If we put 170 ETH in a liquidity pool, we will also add 170 ETH worth of MANA (~1M MANA)

1 Like

Hiya - yes as others mentioned this will just be Eth/Mana LPs to prevent us needing to sell any tokens - I would recommend this be how the LPs be split up:

  • 50% Uniswap on Eth mainnet
  • 40% Quickswap on Polygon ZK network
  • 10% Quickswap on polygon PoS network

These exchanges in my opinion hold some of the best reputations on their respective networks for security, and also enable us to fund the polygon ZK environment which will become increasingly important.


I’m all in about deploying more MANA into DEXs, currently the liquidity is so thin that it is not possible to make any significant trade without incurring a huge slippage, and also is the reason why the token was delisted from all important lending platforms (Maker, Aave).

BUT liquidity works best when concentrated. Currently Qucikswap on the PoS network has $1k of MANA/ETH liquidity…

Screenshot 2023-09-03 at 18.36.10

And Quickswap on the ZK network doesn’t even have a market for MANA. Also that network is not supported by the platform, why would we want to deposit 40% of the capital there?? There are dozens of EVM networks, we can’t go around throwing money at all of them.

On the other hand Uniswap has a more decent liquidity. On Ethereum, Uniswap V3 has $400k on the MANA/ETH pair:

And on the V2 it has another $212k, so that’s over $600k in total.

Then on the Polygon PoS network it has ten times less, but still it’s 50 times more than what you can find on Quickswap…

Since the Polygon network hosts a smaller economy, it might not be necessary to have such a huge liquidity over there, but having a solid pool on Ethereum would make the token stronger, and it could help other protocols taking it seriously again as it was in the past. No one would make a loan against a token that has no liquidity.

I think a more sensible allocation would be something like 60/70%% into Uniswap V3 (Ethereum) with a 0-100% range (it means the position would not need to be actively managed), and the other 40%/30% into Uniswap (Polygon PoS) which is the deepest market over there.

Nice proposal.
Allow me to add more.

Since it’s the DAO’s duty to provide LP, this proposal will likely help sellers to exit/sell their token easily so we can end up with more MANA during this period. I repeat, “during this period”.

I am not saying about bad actors that can easily sell. It’s about the treasury since the goal is to replenish the liquidity so that people can buy and sell at ease, without minding a huge transaction spreads.

I voted invalid question because the DAO already decided not to diversify its treasury (for profit) and this proposal wants to spend the little ETH that the DAO Treasury has.
Yes, I am talking about “spend”, not “invest”.

No need for both of you to change my mind. I am just a fish (4.1k VP) swimming (or maybe scavenging)
with the whales. hahaha

Kindly ignore this post.



We don’t have ETH on Polygon, we should focus on Ethereum for the moment

1 Like

For simplicities sake and the above community points - let’s keep this to 100% Eth Uniswap as concentrated liquidity.

We can discuss migrating LP later on as a separate discussion if necessary - although I do believe migrating towards the ZK network will be beneficial for DCL overall - it is perhaps too early.

1 Like

Howdy all,

Thank you for the community feedback, I think there has been some valid points raised in terms of proving out the concept and taking this in steps. As long as we hold Eth in the treasury, we can take this approach slow and get data for any future decisions.

I will be moving my votes to vote 25% (85 eth) paired with Mana into the MANA LP, and 10% (34 eth) towards rocket pool. I hope to reach a solid consensus on both, as they are intended to be complimentary to each others success.

A slow methodical approach should be what is best for the DAO, no matter how much I believe in the proposals and their positive impact, I also accept this is about sustainability and playing smart with what we have been entrusted with - I believe in these proposals and I am happy to take steps to prove their success and grow them long term.

I hope that together we can form a strong majority opinion on one of these tiers based on the feedback and discussion so that we can move both proposals forward to stage 2 with a community settled amount and ensure success.

1 Like

Sandbox has made good decisions for the landfi as well; we should follow and collaborate with BNB too.

This is utterly stupid.
We don’t have MANA to giveaway to MANA lords just to boost their portfolio and hoping to falsely pump our token.

MANA is not minting any more tokens, it’s not inflationary, we don’t have free MANA to give away.
It would need to come from someone, and I doubt you’d be willing to pledge your MANA for that cause, so it would probably come from the DAO and bring absolutely ZERO value to Decentraland.

1 Like

This was literally the first thing the DAO voted to change once it could vote.

Deposit up to 50% of DAO’s Ethereum into MANA LPs

This proposal is now in status: FINISHED.

Voting Results:

  • Convert 0% of the ethereum held 1% 3 VP (14 votes)
  • Convert 10% of the ethereum held 26% 2,268,189 VP (22 votes)
  • Convert 25% of the ethereum held 66% 5,867,782 VP (29 votes)
  • Convert 50% of the ethereum held 6% 562,934 VP (33 votes)
  • Invalid question/options 1% 4,886 VP (3 votes)

Deposit up to 50% of DAO’s Ethereum into MANA LPs

This proposal has been PASSED by a DAO Committee Member (0xfb1afa4dc069ffb47b19dbee196045d508fcd5a2)