As the primary liquidity provider in the Chia ecosystem, we are delighted to partner with Stably to provide liquidity and automated market-making for the first wrapped BTC and ETH on Chia. This proposal is an extension of the DEX liquidity support plan.
We developed an auto market maker to create sell offers on the Chia DEX. It will monitor the BTC/ETH price on CEX and ensure our DEX sell price is higher than the CEX buy price. When someone accepts our sell offers, the program will buy the same amount of BTC/ ETH on the CEX.
To start this business, we must purchase some BTC/ ETH and exchange the wrapped BTC/ ETH with Stably. As the partner, we will have exclusive benefits and full customer support. The fund for purchasing BTC/ETH will come from the current CEX-DEX arbitrage business and DAO treasury. Concretely, 200 XCH from the arbitrage account and 200 XCH from the DAO treasury. The ratio of fund spending on BTC / ETH will roughly be 60 / 40.
Estimating the profit is hard since it depends on the trading volume. It should increase gradually as the wrapped BTC/ETH becomes more popular.
The distribution rule will follow the arbitrage's rule: 85% to DAO stakeholders 15% to DAO operation
The major risk of this business is the price volatility of BTC and ETH. For accounting purposes, we will use initial BTC / ETH as the investment, not XCH or USD.
Like other projects, we have a dashboard to provide the operation details. Everything is under development. http://liquid.taichiadao.com/d/7BD_6Tf4k/btc-amm?orgId=1&refresh=10s