[DIP- 48] SSV Foundation Market-Making Service Agreements – Continuation of DIP-20

Proposals
1

PROPOSAL SUMMARY

This proposal expands the market-making program established in DIP-20 SSV Foundation Market-Making Service Agreements (hereinafter: DIP-20), maintaining the 100,000 SSV loan and allocating an additional 200,000 SSV. This brings the total SSV managed by the SSV Foundation (hereinafter: “Foundation”) for market-making activities to 300,000. Furthermore, the program will transition from two market makers to one.

MOTIVATION

Under DIP-20, the DAO approved a program whereby 100,000 SSV were minted and loaned to market makers in order to improve market liquidity for the SSV token across multiple venues. At the time, this was considered sufficient to achieve tighter spreads and deeper order books for SSV.

Since then:

  • The ssv.network DAO and protocol have expanded significantly within the staking ecosystem, now with more than 1.3M ETH staked;

  • Trading activity and participation around SSV have increased, making deeper and more resilient liquidity increasingly important; and

  • The current market-making agreements are approaching their end, and 100,000 SSV would be returned to the SSV DAO once those agreements expire.

To ensure that liquidity remains adequate and resilient and to reflect the larger size and importance of the network, it is appropriate to refresh and resize the MM Allocation to a 300,000 SSV.

This DIP does not change the Foundation’s mandate or the basic mechanics approved in DIP-20; it simply updates the size and continuity of the program.

PROPOSAL PARTICULARS

1. Mechanics

If this proposal were to pass, the Foundation will negotiate with top-tier market makers well-known in the industry and engage in a 12-18-month agreement with at least 1 Market Maker in a commercial loan agreement for 300.000 SSV to be managed by such a market maker.

This commercial loan agreement is sourced directly from the 100,000 SSV that will be returned to the SSV Foundation upon expiry of the current market-making agreements under DIP-20 and newly minted SSV tokens, as required to reach the total of 300,000 SSV tokens.

At the expiry of the agreement, depending on the option agreed upon, the remaining SSV tokens or USDC received will be sent back to the Foundation. Once received by the Foundation, the SSV token or USDC will be returned to the DAO treasury within 30 days. The Foundation will seek the best commercial terms and options agreement, taking into consideration the following:

  1. Provision of liquidity on multiple venues and multiple pairs
  2. The best competitive market spread
  3. The best commercial option and uptime

The selected market makers are not allowed to use the capital given under this proposal for any DEX usage.