7.P3 Allocation of 2.5 Million Premia Tokens for Market Maker Services

Premia Publication Process - P3 P3
,
1 
---
p3 (mod): 7
network: all
title: Allocation of 2.5 Million Premia Tokens for Market Maker Services
status: P3
mod status (mod): Accepted
author: DK (@dk3)
mod: DK (@dk3)
sponsor: DK (@dk3)
created: 2023-10-20T00:00:00.000Z
proposal (mod): >- NA
type: Task
group (mod): NA
---

Allocation of 2.5 Million Premia Tokens for Market Maker Services

Status: P3P (Proclamation)

Author: @dk3

Summary: This P3P notifies the community of an allocation of 2.5 million Premia tokens from the partnership allocation for professional market maker services. The aim is to improve Premia liquidity on decentralized exchanges and facilitate healthy trading activity.

A portion of tokens will be vested over a longer term period. Market maker performance will be monitored based on various metrics.

Motivation:

  • Premia currently suffers from low liquidity on DEXs, leading to high slippage and poor trading experience.

  • Increasing liquidity requires the provision of incentives to liquidity providers. Hiring market makers is a common practice for bootstrapping liquidity.

  • 2.5 million Premias represents only 2.5% of total supply. Allocating this amount for market-making will significantly improve liquidity. The utilization of the tokens will be for various beneficial services.

  • Multiple reputable market-maker firms have been evaluated through an RFP process to select the best fit. This is likely the first of a few relationships.

  • Tokens earmarked for this purpose can be found here.
    Partnerships: 0x22b62A85A2a8f8812b7aAc2B873E0227dd0C2125

  • To avoid doubt, there is no change in Tokenomics; this is just a notification post from which the earmarked allocation will be drawn to allocate for this service. There will be no snapshot vote.

Specification:

  • 2.5 million Premias will be allocated from the partnership allocation to fund the first market-making relationship.

  • Performance will be monitored based on various metrics that will be shared with parliament regularly.

  • Based on the results, the program may be extended, adjusted, or discontinued.

  • Market Maker will also provide other services to increase the health of the Premia Options Platform.

This allocation will enable Premia to improve liquidity, benefitting the wider community of users and traders. The market maker will be closely monitored for optimal asset utilization. Details have been obscured for this proclamation; however, the Operator has done thorough due diligence and carefully worked with the service provider on a mutually beneficial deal to uphold their fiduciary duty while satisfying the needs of the wider stakeholder group.

3 Likes