This proposal seeks to establish a permanent, DAO owned Liquidity (“DoL”) liquidity “floor” in the UniV3 SDL/LINK pool using existing DAO treasury assets.
Rationale
The Uniswap V3 SDL/LINK pool (TVL ~$800,000) exhibits concentrated liquidity among a small number of LPs. This poses a structural risk from potential large-scale liquidity withdrawals, which would increase slippage and degrade trading conditions in “risk off” scenarios. The DAO treasury currently holds ~681 LINK earned from the SLURP-43 staking initiative. This proposal seeks to take these LINK and match them with the treasury SDL and inject ~$34K as DAO-owned-liquidity in the SDL/LINK UniV3 pool to kickstart this pilot.
By establishing a DAO-owned-liquidity (“DoL”) position we can:
Create a Stable Liquidity Floor: Kickstarting a baseline level of liquidity that is always present and controlled by the DAO, reducing dependency on mercenary capital(essentially eliminating “rugpull“ risk in the medium to long timeframe).
Improve Treasury’s Capital Efficiency: Pair the LINK earned from reSDL with treasury SDL to create a productive, fee-earning liquidity position that directly supports our ecosystem.
Boost The Pool’s Depth: A deeper pool allows for larger trades with less price impact, making it easier and more attractive for new participants to buy and sell SDL.
Allocate ~681 stLINK from the DAO treasury and swapping the stLINK to LINK via Curve.
Allocate an equivalent USD value of SDL from the DAO treasury, determined at the time of execution to match said LINK.
The DAO multi-sig will combine the allocated assets and deposit them into the UniV3 SDL/LINK (1% fee tier) pool.
The position will be a full-range LPing to ensure constant liquidity across all price points.
The resulting UniV3 LP NFT will be held by the DAO treasury.
Any modification to this position requires a new, separate governance vote.
Financial Impact/Reasoning
Treasury Outlay: ~681 $LINK (approx. $17,000) and ~$17,000 in $SDL.
Total Liquidity Provided: ~$34,000.
Pool TVL Increase: ~4.25%, based on current $800,000 TVL.
DAO Revenue: Trading fees in the form of LINK and SDL that are generated by the LP position will eventually accrue to the DAO treasury once claimed.
Risk Mitigation: Establishes a permanent liquidity base controlled by the DAO, reducing dependency on external and potentially transient capital.
Capital Efficiency: Deploys idle treasury assets ($LINK, $SDL) into a productive, fee-earning position that supports core protocol infrastructure - on-chain SDL liquidity.
Market Integrity: Increases pool depth, which reduces price impact for traders and improves overall market function.
Conclusion
This proposal is intended to be the continuation of a broader strategy we have employed with stLINK/LINK and wstPOL/wPOL already - of building up protocol-owned liquidity(PoL) and DAO-owned liquidity (DoL). Any future DAO-led liquidity provisions using newly earned yield or other treasury assets will require a separate governance proposal and vote.
I think this is a necessary step to ensure more stability within the sdl/link market.
It can protect buyers from slippage when price goes up. And it can add more weight to the foundation of the pool so its just a little more firm when people make dramatic interactions with the pool, such as mass dumping or buying.
I believe this move makes a lot of sense for the DAO. Since stake.link’s treasury is mainly SDL, anything that helps build a deeper, more resilient market for SDL directly strengthens the value of it’s core asset. Pairing it with LINK here does exactly that, while also putting idle assets to work earning fees.
The full-range choice is a good starting point, as it guarantees continuous liquidity and acts as a natural rebalancing mechanism. If SDL appreciates, the DAO gradually sells into LINK, which diversifies the treasury into a more liquid asset. If SDL falls, the DAO accumulates more on the downside, effectively buying back our core asset at lower valuations. Either way, the treasury comes out stronger, and SDL’s market gets deeper.
Looking ahead, there’s an interesting opportunity with slightly more concentrated liquidity. In that setup, any LINK accumulated when SDL appreciates could be paired with additional SDL reserves to expand DAO-owned liquidity further. This would amplify the positive effects, but it would also require careful planning to avoid over-exposing the DAO, so starting with full-range makes sense as a first step.
Overall, this feels like a pragmatic, low-risk move that both supports SDL’s market and makes better use of treasury assets. I’m strongly in favor of moving this forward.
This improves accessibility to the token through a mechanism that is in the crypto ecosystem. It seems natural and good. Someone is going to have access to and control of that market force and the revenues it generates. The primary benefit is increasing the accessibility of SD. I believe that liquidity could be concern for some that have SDL on their radar. Its presence and usage on that platform are their own form of marketing as well. The rebalancing towards SDL at relative value prices is a nice bonus.
I think that something like this may eventually require sustained oversight, even if intermittent. This should be considered.