Adjustment to the Usage of POL in Pool #1060

Summary

Following the completion of the public token sale on July 5, 2023, Quasar has allocated approximately $484,000 worth of QSR and OSMO tokens to seed Pool #1060. These seed tokens, also known as Protocol-Owned Liquidity (POL), shall be migrated from Pool #1060 to a special permissioned Quasar market-making concentrated liquidity vault which is designed for healthy liquidity provisioning over yield generation based on a newly established, supercharged QSR/OSMO pool on Osmosis.

Motivation & Rationale

• Swap Efficiency Optimization: Moving the POL from a regular pool to a supercharged pool optimizes LP provisioning for swapping with lower slippage.
• Ongoing Trend: Nearly half (7 out of 15) of the largest pools on Osmosis are already supercharged, and the trend is on the rise.
• Aligned Focus: Transferring the POL to a supercharged pool aligns with Quasar's current objectives, placing emphasis on CL vaults.
• Vault Launch: This migration serves as prerequisite by establishing a stable pool for a potential future QSR/OSMO Dynamic CL vault.

Details

• Current Placement: Quasar's POL is currently situated in pool #1060 (https://app.osmosis.zone/pool/1060).
• Dominant Share: The POL represents approximately over 90% of the Total Value Locked (TVL) in pool #1060.
• Foundational Purpose: The POL's primary objective is to establish a robust liquidity foundation, not as a yield generator aiming to maximize earnings for the deployed tokens.
• Optimal Utilization: Given that the POL constitutes nearly the entire liquidity in the pool, optimizing its use is crucial. The most promising avenue is a supercharged pool, enhancing the efficiency of the provisioned POL for this specific purpose.
• Deployment: Establishment of a permissioned Quasar market-making vault in collaboration with DLL. The sole purpose of this vault is to efficiently set dynamic ranges, ensuring healthy liquidity. To maintain good motives, DLL will not benefit from any yield generated by this vault.

Specifications

• Supercharged Pool Creation: Establish a QSR/OSMO pool with a 0.2% swap fee.
• Process: Withdraw POL from pool #1060 and depositing it into the Quasar market maker vault.
• Timing: Execute this process within 24 hours after passing the on-chain decision.
• Amount: Migrate 100% of the current POL (including rewards) to either the new pool or the Quasar market maker vault building on the pool.

Voting

• By voting YES, you agree to the changes above proposal suggests.

• By voting NO, you disagree with the changes above proposal suggests.

• By voting ABSTAIN, you express no opinion on the matter.

• A No With Veto vote indicates a proposal either (1) is deemed to be spam, i.e., irrelevant to Quasar, (2) disproportionately infringes on minority interests, or (3) violates or encourages violation of the rules of engagement as currently set out by Quasar governance.