Liquidity-as-a-Service => Partnership with FEI DAO

Hey! Bruno here from Fei community!

Fei is already a partner in Gelato Fuse pool by seeding FEI there and also with G-UNI FEI DAI. I would like to bring the discussion about a new kind of partnership, the Liquidity-as-a-Service (LaaS) offering.

Liquidity Mining attracts capital at a high cost, LaaS is a cheaper alternative.

With LaaS, projects can get immediate liquidity without issuing more tokens and upfront capital costs. Fei & Ondo Finance help by doubling their liquidity.

DAO allocates tokens to an Ondo Vault; this amount is combined with Fei to LP on Uniswap or Sushiswap. Currently, the program lasts 30 days and at the end of the period, DAO would pay a 0.17% fee (2% annual fee divided by 12 months) on the total value of the governance token deposited in the vault. This 0.17% fee can be partially, if not fully covered. This will depend on the accrued trading fees of the vault and the impermanent loss that are kept by the project.

You can use this worksheet to make simulations.

It is a good way to increase liquidity with a much lower cost than liquidity mining and to gain awareness by participating in this innovative partnership.

Fei is finalizing the selection of launch partners for LaaS. Those selected to be part of the launch group can benefit from the low fees associated with the group.

More resources on the Liquidity-as-a-Service here: Medium Article.

I would love to hear Gelato community about this idea.

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Hi Bruno,

Congrats on the collab with Ondo! And I honest think that this approach is somewhat better than that of Tokemak and Olympus Pro to various degrees, especially the characteristics of projects getting to keep their native tokens and low upfront cost.

My only concern is regarding the duration of the LaaS. Ideally, the LP from LaaS can be redeemed when itโ€™s no longer a significant portion of the pool. Though from what I understood, the way how it works with Fei+Ondo is time based. Granted that in the article it does mention that itโ€™s โ€œflexibleโ€, I reckon that the flexibility is not without cost. Could you elaborate more on that so we can see what our options are? Thanks and my apologies in advance if itโ€™s already been explained somewhere that I missed.

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Hey @btt , that`s a good question!

Actually, this launch group will have flexible duration. The DAO can choose a duration of 6 months, for example, with an opt out with 30-day notice.

In the next few weeks, Fei team will hold AMAs and set up calls with issuers interested in joining this limited launch group. It would be good to continue this conversation with Gelato community.

Feel free to ask any other question!

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30-day opt out notice sounds pretty flexible indeed!

Regarding the pool deployment, does the project have the say on which DEX it should be deployed, or is it a joint decision with Fei+Ondo as well? I think what makes our case a bit unique is that there is an intention to deploy the pool in uni v3 coupled with a rebalancing strategy, hence the LPs donโ€™t have to make decisions on the ranges. Does the project have the full control on where and how to launch the pool?

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Would be great to expand our partnership with the Gelato team through providing LaaS!

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We can support Uni v2 or Sushi right now. Weโ€™re working on supporting some actively managed strategies on Uni v3 as well.

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Hey @btt , the project can decide the DEX to be deployed.

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hey @brianna and @Bruno, thanks for this proposal. This sounds super interesting, let me dig a bit deeper into it.

Are you also considering offering this service on e.g. Polygon?

I think we would be interested in using our G-UNI ERC20 wrappers as LP tokens for this as well, would that be possible with Ondo vaults? I guess it should be as G-UNI tokens are simple ERC20 tokens.

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This sounds like a great use case for G-UNI. I recently wrote a post about how a fixed range โ€œbrick-by-brickโ€ strategy could be used by Olympus Pro. This strategy could be applied to LaaS as well.

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Hey Hilmar! G-uni tokens should be able to be used too. And Layer 2 are on the roadmap for Q1 2021 as is Uni-v3