[RFC] PTIP-91: Across Bridge Liquidity

PTIP-91 Across Bridge Liquidity

Simple Summary

The liquidity on Across is currently quite low and that makes bridging even medium sized amounts for users impossible and/or means long bridging times. With the introduction of przPOOL Vaults and PT becoming more and more MultiChain being able to bridge POOL tokens easily between chains has become an important part of the protocol.
This proposal aims to solve the low liquidity problem on Across by putting more funds into the Across POOL LP on Mainnet and the Across Relayer maintained by the Across Team.

Abstract

This proposal will increase the current protocol owned liquidity on Across by 75k from 75k to 150k. Furthermore we will send 25k POOL to the Relayer maintained by Across to increase our Relayer amount from 25k to 50k.

Motivation

This proposal aims to solve the low liquidity problem on Across by putting more funds into the Across POOL LP on Mainnet and the Across Relayer maintained by the Across Team. Currently the protocol has 75k POOL in the LP and 25k in the Relayer. In Theory anyone can provide liquidity for the LP but most funds are protocol owned right now. The protocol earns fees by providing liquidity and the funds can stay in the treasury after a team has executed the needed transactions. The total POOL staked on Across is currently 104k, utilization is at 98% and APY at 5.5%.
The Across Relayer is needed to facilitate fast transactions and is currently maintained by the Across Team. Funds for the Relayer would be in their custody. The Across Team has been a very experienced and trusted partner in the past and has managed to solve any questions and problems efficiently and fast. Furthermore they are providing the bridge service completely free of charge.

Specification

  • Transfer 25k to Across Relayer eth: 0x428AB2BA90Eba0a4Be7aF34C9Ac451ab061AC010
  • Approve 75k POOL Spending for Across HubPool: 0xc186fA914353c44b2E33eBE05f21846F1048bEda
  • Provide 75k liquidity on Across HubPool: 0xc186fA914353c44b2E33eBE05f21846F1048bEda

Status

Tally Draft:
https://www.tally.xyz/gov/pooltogether/draft/2382787486725178877

3 Likes

Thanks for putting this proposal together @Lonser !

I’m not particularly opposed to this plan since I see very little downside to it, but at the same time it seems like it’s just a bandaid to the liquidity problem and I’m certain there will still be liquidity issues on Across at some point after this is executed. Maintaining cross-chain liquidity is a difficult task for any token and although this doubles the available liquidity of POOL on Across, it could still be used up by a few or even one big bridge event and then it would be locked up until someone bridges the other way or Across moves the excess tokens around (which can take days if not weeks).

I think a more sensible path forward is to put more emphasis on L2 POOL liquidity and providing a reliable bridging experience by using a service like Circle’s CCTP, which has little to no downtime and is just dependent on the swap rates available on the source and destination chains.

Services like CCTP do have more fees involved, but are still relatively quick (~25 min). If someone wants to avoid these fees, they can always use native bridges to get to their destination if they are willing to wait up to a week (which is probably what they would have to wait for with Across anyway if they were bridging a large amount).

In short, I have no problem with a reasonable liquidity increase on Across for people to use for a quick bridging experience of small amounts, but at the same time we should be focused on surfacing the other ways they can already meet their bridging needs through services like CCTP when Across liquidity is inevitably locked up.

This proposal would grant near instant bridging for transfers of 10,000 POOL or more most of the time for a fraction of the fees of the CCTP idea. Across went out of their way to provide support for Pooltogether despite POOL not fitting the criteria, so it would be nice to continue to build on that. I’ve not seen a scenario where somebody had to wait more than a few hours(let alone a week), but you would have to have founder level amounts of POOL to encounter this problem.

We’d be upping liquidity to 175,000 POOL which is a huge amount of POOL to be bridged in a short time. Most of these top 20 addresses don’t really move POOL or are exchanges and L2 bridges.