[HIP-4] HMX Hoard Program Improvement For Deeper On-Chain Liquidity

HMX Improvement Proposal (HIP)
1

Hey Dragons! :dragon:
We have a new proposal from the HMX team designed to enhance the liquidity and stability of our token. The primary goal is to create a more robust and sustainable ecosystem that benefits all stakeholders by improving the on-chain liquidity of the HMX token. Let’s take a closer look:

Background:
In February, we launched the Protocol Owned Liquidity (POL) initiative, which dedicates 5% of the HMX protocol’s revenue to build up POL for future strategic uses. In April, we introduced the HMX Hoard program, a systematic program to use POL to buyback HMX.

Observation:
As we continue to build upon the success of our Protocol Owned Liquidity (POL) initiative and the HMX Hoard program, we have identified an opportunity to further enhance the stability and long-term success of the HMX token. After careful analysis and discussions among the team members and our councilors, we believe that an increase in the on-chain liquidity for HMX token would be beneficial for our ecosystem as it will give users and potential buyers the confidence that they will be able to enter and exit large positions without suffering large price impact.

Proposal:
To tackle this challenge and ensure the continued growth and success of the HMX token, we propose to modify our current buyback strategy for HMX tokens to improve the liquidity profile of HMX, with changes applied retroactively.

Instead of allocating the entire POL funds towards buying back HMX tokens, we propose using 50% of the funds for buybacks while retaining the remaining 50% in ETH , allowing us to inject both HMX tokens and ETH into the HMX-ETH liquidity pool.

Transition Phase:
Initially, we will allocate 100% of the newly earned POL funds to purchase ETH. These ETH will then be paired with the 30,439.3486 HMX tokens that constitute the POL and have been acquired through previous buybacks. Both will be added to the HMX-ETH liquidity pool. Once all the previously acquired HMX tokens have been utilized, we will seamlessly transition to the proposed 50/50 allocation.

This change will contribute to the overall stability and long-term success of our ecosystem, further strengthen the HMX protocol and provide enhanced value to our stakeholders. Here is a summary of the proposal:

Current HMX Hoard Program:

  • Buyback of HMX tokens with 100% of POL funds (5% of the protocol’s revenue)

Proposed Modification to the HMX Hoard Program:

  • Buyback of HMX tokens with 50% of POL funds (2.5% of the protocol’s revenue)
  • Retention of the remaining 50% of POL funds in ETH (2.5% of the protocol’s revenue)
  • Injection of both the bought-back HMX tokens and the retained ETH into the HMX-ETH LP

Benefits:

  • Increase on-chain liquidity
  • POL will grow from trading fees earned
  • Diversify POL holdings into ETH
3 Likes
2

This is a great idea. I think it’s truly important for us to expand the liquidity depth of the LP.

I recently submitted a discussion thread on how to further improve the protocol tokenomics with the introduction of DP as a vesting requirement for shorter vesting period and extension for vesting period for non-DP holders.

Would like everyone to go check it out here.

2 Likes
3

Liquidity is important to establish a base line in uncertain market times and show future investors the protocol is here to stay.
If this was put to a vote I think this will pass by a landslide.

1 Like
4

I would actually want to know when the buyback occur and at what price (range)? Via which method (could they be OTC?)Based on onchain info, as much as I I would want to believe the team that the POL actually went info buyback, the transactions lack transparency. Second, the account should have at least 30,439.3486 HMX but then the account only showing 21,737.9099 HMX.
DeBank | The Real User Based Web3 Community
I believe many are curious about the shortfall too and questioning about the buyback (method) and further explanation is very much needed.

1 Like
6

Hey @mei, we acquired some $HMX through the TWAP feature using a separate wallet. That’s why the main wallet is showing a lower balance than originally stated.

The Time-Weighted Average Price (TWAP) is an acquisition strategy that allows purchases to be spread out over time to reduce the impact on the market price, which is why we favored this approach for the HMX token buyback.

The acquired funds have been transferred back to the main wallet.
For transparency, you can find the wallet we used for the TWAP acquisition of $HMX right here: 0x0Ad8c9fc26Da8f701F410db0134887F0c162e8FC

Let me know if you have any further questions.

7

Hey Dragons, we are moving this proposal to the HIP section, as no major changes have been suggested, and we are now entering the final stage of deliberation. Once this phase concludes, the proposal will be submitted to Snapshot for voting.

8

Hey Dragons, HIP-4 is now live on Snapshot for voting!

:arrow_right: Vote HIP-4: Snapshot

9

Hey Dragonsl! HIP-4 has been voted and we will be implementing the Hoard Program and POL changes as suggested by the proposal. Thank you all for your participation!

vote result: Snapshot