TIP-43 Chain Migration Incentives

Summary

  • Migrate 80% of TreasureDAO’s DAO-owned MAGIC/ETH liquidity on Arbitrum One to the Treasure L2 mainnet (100%) upon its launch.
  • Migrate the other 20% of DAO-owned MAGIC/ETH liquidity from Arbitrum One to L1 Ethereum at the time of proposal passage.
  • Institute new LP rewards to encourage migration of MAGIC and partner token liquidity from Arbitrum One on Sushi and Magicswap to Treasure L2.

Rationale

As we draw nearer to the launch of Treasure chain and MAGIC staking via EigenDA we will want some liquidity on L1 Ethereum as restaking users are primarily on L1 ETH stakers. While the Treasure team is working diligently to provide a L2 restaking option, having liquidity on L1 will lead to increased visibility and usage by ETH holders unrelated to gaming.

Moreover, some of Treasure’s protocols are being developed into new product offerings more appropriate for the L1 market. Having liquidity on L1 will ensure that these protocols can still utilize MAGIC and allow us to to explore collaborations with other Eigenlayer AVS projects that are based on L1.

Proposal

MAGIC/ETH Migration

At passage, core contributors will remove 20% of the total 15,830.25 LP tokens (3,166 LP) from Sushiswap on Arbitrum One, migrate the resulting unpooled ETH and MAGIC to L1, and create a new LP position on Uniswap v3 with identical parameters to the L2 pool.

We will migrate the remaining 80% of MAGIC/ETH LP tokens in the same manner and pool the resulting funds on Magicswap V2 when Treasure Chain launches.

The Uniswap V3 concentrated liquidity position will be set with a price range between:

  • Low: 20,000 MAGIC per ETH
  • High: 400 MAGIC per ETH

This is a price range between approximately $0.12 MAGIC to $6 MAGIC at current MAGIC and ETH prices (as of September 10). Protocol-owned liquidity will only exist between these price ranges. If prices move outside of this range, there will be less liquidity and the DAO will no longer earn trading fees.

Currently 1 ETH buys you approximately 7,000 MAGIC, roughly $0.34 per MAGIC as a point of reference.

Magicswap Game Partner LP Migration Incentives

Our goal is to attract medium- to long-term LPs who hold MAGIC and are happy accumulating for the foreseeable future. We aim for a 30% APR target over the next 6 months, with elevated incentives for the first month (50% APR target) to encourage early migrators. These calculations assume the current TVLs in pools (in reality not all liquidity will migrate, and new LPers may join due to incentives, so realised APRs will differ).

Rough rule of thumb for determining incentives (indicative): (MAGIC_IN_POOL * 2) * TARGET_APR / 12

  • MAGIC_IN_POOL: is the amount of MAGIC in the LP pool (half the pool) rounded to the nearest 5k.
  • TARGET_APR: target yield that LPers will see:
    • 50% APR for first month
    • 30% APR for the next 5 months after

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