DAO Liquidity Migrates : A Look at Adoption So Far

H. S.
4 min readJun 25, 2021

TL;DR

  • For the next 30 hours, DAO-ETH liquidity tokens can be instantly unstaked without a 10% fee
  • DAO-ETH liquidity is losing all incentives
  • DAO-USDC tokens qualify for 1,5x DAO power
  • $300,000 campaign is live to DAO-USDC users⚡️
  • DAO-BUSD stablecoin liquidity pool is now on Pancake, making DAO trading possible on BSC ⚡️

Over the past months, DAO token adoption has grown significantly and the associated products have generated substantial burn of circulating supply and incentives for stakers.

However, in the past 6 weeks, ETH has faced a major price drop of 60%. A drop that is in line with DAO price. This linkage is due to DAO having so much liquidity against ETH on Uniswap. At our peak liquidity, a 5% drop in ETH price was equal to a $1.5M DAO market sell.

This has created a negative feedback cycle. DAO fell in price due to being paired with ETH. People who feared ETH would drop, sold DAO aswell because they saw it being strongly pegged to ETH.

This is a scenario we want to completely dissolve, and we are doing so by moving all DAO token liquidity to stablecoins:

  • Uniswap liquidity incentives are being migrated to USDC pool
  • Pancake Swap is live with BUSD
  • Centralized exchange market making is now primarily on USDT

DAO Maker Products have Experienced Incredible Adoption

A. Product Focus

DAO Maker’s approach to democratize venture capital and make opportunities like seed round prices available to mass retail is the most ambitious and powerful DeFi product.

  • $7.15M has been raised on the DAO Pad in Q2, at an avg live ROI of 6x ($35.75M in gains in one quarter)
  • The value staked in the DAO Vault is $40.5M
  • That means, collectively, DAO stakers earned 87% in Q2
  • That’s a flat growth rate of 348% per year

The reality is all-time-high rates are even higher, so the true return is over 1,000% per year.

Compound, Yearn, and Curve offer TINY fractions of this, even when committing volatile assets like ETH, while committing to major locks of up to 4 years.

We are releasing additional products that will multiply the already industry-leading available with DAO tokens.

B. Adoption Rate

The wider DeFi market has grown at an exponential rate. DAO Maker’s approach to DeFi, disrupting venture capital, has grown at an equal rate.

In fact, while the wider DeFi ecosystem has lost adoption over the past 6 weeks, DAO ecosystem has continued to grow.

DAO Maker Adoption (growth of VC disruption)
DeFi has undergoing severe contraction

While May was a brutal month for DeFi TVL, DAO token engaged continue to grow by more than 20%.

Our business line is significantly different from the wider DeFi market which relies almost entirely on lending and trading. Furthermore, most DeFi products fail to build a business model and hence never generate any form of net token supply reduction or operating profits.

  • DAO Maker is foremost a business development operation; it cannot be forked
  • The net token supply continues to have rapid month after month reduction, ahead of even most CEX, let alone fresh startups
  • And still, the rates on DAO committed is significantly higher than on DeFi protocols, without even inflating DAO supply

C. State of the Token

It is evident across the industry that the primary sell pressure of any token is from either its primary offering or its farmers. As we are not a liquidity protocol, we do not face the sell pressure of farmers.

As for primary sale buyers, more than 50% of supply is already released.

Yet, what’s incredibly important is the rate at which the ecosystem is burning tokens that were released in the sale.

  • 7.3% of sale tokens burned in just 1 quarter; this is a burn from true circulation, not tokens held by team
  • 1.2% of circulating supply has been generated by Vault fees, which can be used to incentivize liquidity and other campaigns without inflating circulation
  • 0.7% of circulating has been acquire as liquidity by Vault fees, in just the past 3 months

Looking Ahead

The launch of the Infinity Pad on the Chainmaker Kit is a major expansion on the benefits of committing DAO.

Yet, it’s worth noting that DAO already remains as the most cash-generating asset in the market, and also the asset with the most rapid decrease in circulating supply (7.3% per quarter, annualizes as ~30% per year).

A horde of new products are on the way, all in line to significantly boost token demand, utility, supply reduction.

DAO token fundamentals are incredibly valuable, and they grow each day as more DAO gets burned from circulation, and more products get released to grow its demand.

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