Proposal: Market making service agreement with Efficient Frontier

Abstract

This proposal is published for presenting the terms of $SSV market-making services to the ssv.network community and approving it:

  • Authorizing Efficient Frontier as an official ssv.network market maker
  • Transfer $1,300,000 worth of SSV Tokens to Efficient Frontier as a loan for market-making services.
    The amount of SSV tokens to be transferred will be calculated based on the CMC price of the token at the time of transfer to Efficient Frontier.
  • Efficient Frontier will either return the loaned amount at the end of the market making period or purchase the tokens for a predetermined strike price
    (The strike price calculation is elaborated below).
  • Efficient Frontier will commit to maintain inventory and provide market making services on Binance.com, Binance.us, Gate and in the Uniswap V3 pool

About Efficient Frontier

Efficient Frontier is a cryptocurrency algorithmic trading and market making firm. We spun out of a traditional finance high-frequency trading firm in 2017 and have since grown to become one of the leading market makers in the cryptocurrency ecosystem. Our team is composed of traditional finance quants and traders, as well as experienced crypto-natives, all of whom share a passion for making cryptocurrency markets transparent and fair. As a designated market maker we are proud of providing a high standard of service and ethics, supporting numerous projects from launch to maturity.

Services

The designated market making service is optimized to build liquidity and maximize trade volumes while maintaining the highest standards of ethics and transparency.

CeFi

Efficient Frontier will make markets for the SSV token on Binance.com, Binance.us and Gate. On CeFi, we do this by quoting on both sides of the book for SSV’s markets so that traders and investors can trade efficiently. All trading is done through the exchange API, with 24/7 human monitoring in order to adjust the parameters based upon market conditions.

DeFi

On DeFi, Efficient Frontier utilizes bots and strategies to provide liquidity on AMMs, rebalancing the pool to maximize liquidity. On concentrated liquidity pools, our strategies and bots generate more liquidity with less funding. We optimize across different pools and networks for maximum liquidity.

Commercial Terms

Efficient Frontier will not charge a monthly fee for providing market making services. We take out a loan from the client and use this as inventory to provide liquidity for their markets. Additionally, Efficient Frontier bear the PNL, so that ssv.network avoids potential losses from the market making activity. Throughout the term, we will be trading in and out of our positions in order to hedge ourselves.

Efficient Frontier will take a loan in SSV. The funding size required at the start of service is $1,300,000 worth of SSV Tokens. At the end of the term, we will have the right to either purchase the loan at the agreed upon strike price or return the loan.

Efficient Frontier Warrants:

  • Authority and Competence – Efficient Frontier has the full right, power and capacity to perform its obligations and provide the services under the offer and it shall exercise a degree of competence and professionalism which would reasonably be expected from a skilled and experienced provider engaged in the same type of business as Efficient Frontier;
  • No conflict - performing the market-making services shall under the offer not breach any regulatory or contractual requirement governing Efficient Frontier is subject to;
  • No actions - To Efficient Frontier knowledge, there is no action or threatened action against Efficient Frontier which would substantially impair its right to perform the market-making services or adversely affect its financial condition;
  • Efficient Frontier shall defend and hold harmless the DAO and DAO members from and against all third-party claims or actions, costs and expenses arising from or in connection with (a) any claims by third parties resulting from or in connection with the provision by Efficient Frontier of the market-making Services, or (c) any breach by Efficient Frontier or its agents or sub-contractors of applicable laws or regulations.The indemnification shall be subject to the following conditions: (i) the party seeking indemnification shall notify Efficient Frontier in writing of the applicable claim, promptly after becoming aware of the claim, and (ii) the party seeking indemnification shall provide Efficient Frontier with the right to exclusively conduct the defense of such claim, and shall assist with such defense as may be reasonably requested by Efficient Frontier. In the event that any DAO members seek indemnification, they must appoint one representative with the full authority to represent them vis-à-vis Efficient Frontier with respect to such matter, and Efficient Frontier will be required to interact only with such representative
  • Efficient Frontier shall have sole responsibility for complying with all legislative and regulatory requirements relating to the market-making services and has the means, resources and know-how to satisfy such requirements.

Ask:

We are requesting ssv.network DAO Community to pass a proposal to approve the transfer of $1,300,000 USD worth of $SSV tokens (based on the strike price) for market making services on Binance.com, Binance.us, Gate and Uniswap.

To facilitate the work of Efficient Frontier on the community’s behalf to execute market making and liquidity provision on cefi and defi, we request the ssv.network community to release $1,300,000 worth of SSV tokens.

Starting date: within 10 days of passing the proposal
End date: 18 months later

EF will return the loan or USDC within 48 hours from the end of the agreement period.
EF will send a weekly activity report to the dao address

Strike Price Calculation: The 7-day average price is calculated by taking the sum of the hourly candlestick prices on the SSV/BUSD pair on Binance.com for the first 7 days of trading (168 recordings) and dividing by the total sample size (168). Two strike prices are calculated by taking the 7-day average price from the deposit day and adding 10% and 45% to them respectively.

ETH Address: 0xb9424fa9bc8c5524c38558146a1b864ea21124b0

A Yes vote for this proposal would allow for the tokens to be released as a loan. At the end of 18 months, Efficient Frontier shall have the option either to (i) return the loan in SSV that was provided or (ii) purchase the loan in whole or in part for the amount as desired at the strike prices and return any remaining part of the SSV loan. If this option is not exercised (and the Efficient Frontier choses to return the loan), the SSV lent shall be returned to ssv.network.

A No vote would reject these terms.

Efficient Frontier Social Links

7 Likes

I think this is a great proposal that will bring a lot of value to the project.

However, can you please clarify if this proposal is for 130,000 SSV or $1.3M of SSV? And if it is $1.3M of SSV, how specifically will the token price be calculated? Same as the strike price calculation? (7-day average, using hourly closing prices)

You state:

…we request the ssv.network community to release $1,300,000 worth of SSV tokens…

Then also:

We are requesting ssv.network DAO Community to pass a proposal to approve the transfer of 130,000 $SSV tokens for market making services…

Hey @fod , thanks for the feedback! much appreciated.

You made a great point - this is actually a mistake in the proposal. The deciding factor as to the amount of tokens sent is, according to our proposal, the strike price that will be decided upon in the 7-day average.

Therefore, the correct calculation is the $1.3M USD value of tokens, divided by the aforementioned strike price will give us the amount of tokens to be sent to Efficient Frontier.

As an example, assuming strike price is $18:
1,300,000 / 18 = 722,222.22 SSV tokens to be sent.

I’m amending the proposal now with the correct explanation.

1 Like

When is this going up for a vote?