Summary Launch MagicSwap, an automated market maker (“AMM”), as a decentralised, open source product that is governed by the TreasureDAO community.
The initial code will be developed and released by TreasureDAO for the benefit of and operation by the Treasure community and Treasure ecosystem as a ‘key component of infrastructure in the service stack’. Under this model, any community member can contribute code to advance the product (subject to an agreed community review process). This not only empowers builders to advance the AMM, it further enables DAO members to actively drive key product decisions via governance through gMAGIC voting under specific MagicSwap proposals known as MIPs (MagicSwap Improvement Proposals).
This TIP proposes:
- The establishment of a community AMM Council who will serve as multisig signers responsible for executing community voted changes; and,
- Key mechanisms, including token listing, fees and liquidity that empower the community and facilitate growth in the ecosystem.
Rationale
- Provides valuable infrastructure to partner cartridges looking to integrate with TreasureDAO (forms another layer on the ‘infrastructure stack’)
- Strengthens the utility of the MAGIC token through:
- Governance over the design and operation of the AMM
- Becoming the base pair for partner projects solidifying MAGIC as the reserve currency of the metaverse.
- A decentralised, open source model:
- Allows the community of builders to actively contribute to and shape the product.
- Empowers the community to drive key operational mechanisms such as listing, fees and liquidity provision.
Proposal Launch MagicSwap as a decentralised, open source and community run product for the benefit of, and use by the Treasure ecosystem and community.
The following design principles are proposed:
- Community owned:
- MagicSwap will be community owned, decentralised and open source
- Any community member will be able to access and contribute to its development (ie. provide code) via community governance (eg. gMAGIC voting)
- Community governed: The AMM will be governed by the community, with key mechanisms proposed and ratified by any DAO members through proposals submitted via TreasureDAO governance; such as:
- New listing requirements, fees and distribution, liquidity provision
The following key mechanisms are proposed on launch:
- **Token Listing: **
- Projects seeking a listing on MagicSwap must submit a proposal here. As part of this, projects must provide responses to several diligence questions. This includes, without limitation, the following:
- Overview of project and team
- Use case / utility of the token
- How the token and project contributes to the Treasure ecosystem
- Liquidity strategy
- Submissions will be available for the community to review and vote on for listing using gMAGIC via Snapshot. Voting will be conducted on a bi-weekly basis.
- **Fees and distribution: **At launch, all pairs will be denominated in MAGIC. There will be a 4.0% fee for swapping tokens on the AMM where the fee is accrued in the underlying LP token swapped. The fee structure has been set to reflect the volatility and uncertainty liquidity providers face when bootstrapping new games - but can be revised via community governance. The following fee structure is proposed:
- 3.0% to liquidity providers proportional to the liquidity they provide to that pool
- 0.5% to a community fund held in a multisig wallet managed by an AMM council to be distributed via gamified mechanics that incentivise participation and adding value back to the Treasure ecosystem. It is proposed that the MAGIC token has an active role in participating in the community fund mechanisms. The specific mechanics will be discussed and put to vote on by the community (via gMAGIC)
- 0.5% to a separate community fund held in a multisig wallet managed by an AMM council for the benefit of members to support the growth of the Treasure ecosystem. This may include conversion of LP pairs received as fees as required.
- **Liquidity provision: **
- Liquidity can be provided by the community and/or the listing project. This will be a permissionless process.
- Incentives to provide liquidity can be provided by any party on a permissionless basis.
- Feature changes / upgrades
- Community driven processes to guide proposed feature changes will be shared in the near future to facilitate orderly and proficient product management.
AMM Council The AMM Council will be responsible for signing community approved MIPs on a four of six multisig. This includes - but is not limited to - approved token listings, changes to fee structure and broader feature upgrades. The members have been proposed based on their ongoing contributions to the Treasure ecosystem and/or expertise of the MagicSwap product:
- Peita - Lead economist from TreasureDAO who can help inform AMM mechanism design for the benefit of the Treasure ecosystem
- Rappzula - Full stack developer from TreasureDAO with expertise and knowledge of the product code and operations
- Smashe - Co-Founder of Tales of Elleria (ToE); a partner ‘cartridge’ in the Treasure ecosystem with strong MAGIC integration.
- Jona - Founder of Realm, a partner ‘cartridge’ with deep integration into the Treasure ecosystem both through MAGIC and Treasure NFTs.
- BigDawgWooof - Operations Lead of BattleFly; a partner ‘cartridge’ in the Treasure ecosystem with deep integration of Treasure NFTs and MAGIC.
- Fritten - A day one community member who has contributed significantly to the growth and development of the Treasure ecosystem.
As with anything the community does, we have sought to structure this in a way that strikes the right balance among various business, technical and legal considerations.
Polling Period The polling process begins now and will end at 19:00 UTC on 10 July, 2022. If quorum is reached, a Snapshot vote will be put up shortly thereafter.
**Indicative Poll ** For: Approve TIP-14 Against: Reject and reconsider