Proposal to Allocate BSN Emissions to Bunni.pro

Introduction

Bunni.pro is a liquidity engine for Uniswap V3 where projects incentivize veLIT holders to vote on their gauges and direct native oLIT emissions to their LP pair. Although Bunni is a relatively new platform, one can think of it as a layer that exists on top of Uniswap v3, as the liquidity deposited on the platform is really just deposited on Uniswap v3 on the backend. The benefit to this is that since Uniswap v3 incorporates concentrated liquidity, the deposited capital would be very efficient.

As mentioned, Bunni is relatively new, and there is not much competition to bribe veLIT holders. Currently, $1500 in weekly incentives will make Blockswap competitive and allow the protocol to attract votes from veLIT holders, making the BSN/ETH gauge a lucrative option to provide liquidity for.

Since there is no liquid market for BSN currently, the DAO would have to seed its liquidity on Bunni and choose a range in which to provide liquidity for. Luckily, there has been an OTC market that has developed in the Discord over the past few months, and judging by the spread, it seems like bids are around $0.008/BSN and asks are around $0.015/BSN. If we were to take the current market rate of BSN to be around $0.010/BSN, then the DAO would have to bribe about 150,000 BSN tokens to veLIT holders every epoch (each epoch is 10 days), which would match the competitive rate of $1500/epoch.

I propose we set aside 1,500,000 BSN tokens and incentivize veLIT holders over 10 epochs (or 100 days). At the end of this trial period, pending success of attracting sufficient liquidity, the DAO can choose to extend the incentives program to foster healthy liquidity for the BSN/ETH pair.

Benefits of the Proposal

There are several benefits to allocating BSN emissions to Bunni.pro. First, it would help to seed and grow BSN/ETH liquidity. This would make it easier for users to trade BSN on Uniswap, which would increase the adoption of the protocol. Second, it would help to attract veLIT holders to the BSN/ETH gauge. This would increase the amount of oLIT emissions that are directed to the pair, which would further incentivize liquidity provision. Third, it would help to create a more liquid market for BSN. This would make it easier for users to buy and sell BSN, which would increase the price of the token.

Costs of the Proposal

The cost of this proposal is the 1,500,000 BSN tokens that would be allocated to Bunni.pro. However, I believe that the benefits of this proposal outweigh the costs. The increased adoption of BSN and the higher price of BSN tokens would more than offset the cost of the incentives program.

Recommendation

I recommend that the DAO approve this proposal. I believe that the benefits of this proposal outweigh the costs, and I believe that it would be a positive step for the development of BSN.