A few months ago, we formed the REGEN Liquidity DAO following discussions in the Tokenomics Working Group. Since then, we’ve been actively exploring opportunities across web3 and setting strategic goals for liquidity expansion to better serve the Regen community.
Through this work, Base—and specifically Aerodrome—have emerged as key opportunities for Regen to begin restructuring our liquidity. During ETHDenver, members of the Regen team met with the Klima Foundation, who have successfully deployed on Aerodrome and offered to collaborate with us in this effort. Their support will be instrumental in restructuring our liquidity, executing a successful deployment on Aerodrome, and positioning Regen for long-term tokenomic strength in the secondary liquidity market.
With the expertise of Scott Kilduff from the Klima Foundation, REGEN Liquidity DAO is excited to present this proposal for the community’s strong consideration. We believe this initiative lays the groundwork for a major upgrade to the state of our token liquidity—both establishing a solid foundation and setting critical developments in motion.
Attached is the full proposal, which we look forward to discussing with the community.
For much nicer formatting, you can view the pdf of the proposal here:
Version 1.02
March 10, 2025
Structural Liquidity Upgrade
REGEN LEDGER - REGEN TOKEN
A sustainable framework rebalancing REGEN tokenomics to establish explicit, rational, and sustainable secondary market liquidity mechanisms. This proposal redirects 33% of emissions through a purpose-built DAO, REGEN Liquidity DAO (LP DAO) with transparent multi-signature governance, addressing a critical structural gap in the current model. By progressively scaling liquidity and eventually implementing automated operations, the partnership between Regen Foundation, LP DAO and Klima Foundation creates the missing third pillar of
Thank you Scott and Christian for stewarding this proposal!
First thing it has me thinking of as comps are Osmosis and Mars. They’ve both ported inflation and/or rewards to incentivize liquidity providers. Seems like some good precedents and mechanisms sorted out there.
I have two main questions:
Why does this need to be a multi-sig? Doesn’t this create a single point of failure? How could this be a lower-lever operation? Would love to see a security analysis here, as it seems like potentially a substantial liability.
From the perspective of decentralization, one principle I would assert is that this should be just as profitable for small tokenholders as large tokenholders co-founding the project. If we’re working cross-chain here, how do we make it really easy for REGEN community to liquidity provision and get their fair share of the profits?
Other super important comment that James brought up is that there is nothing mentioned here about how the DAO will be governed.
So, to help address this, I have drawn up the beginnings of a draft for how the DAO would be governed. Please add your comments, questions and suggestions.
Thanks for sharing this Christian. I support this path forward making a major commitment to REGEN liquidity. One of these two things would be nice to see before a final sign off.
1- Can Aerodrome approve whitelisting before a full vote is finalized, if they can then this should easily pass.
2- Can we finalize the DAO structure for the end proposal so that there is a clear decision making process for funds. Also if it is a no from Aerodrome there should be a clear strategy in place.
Overally very exciting and as a validator we realize that this increase liquidity should more than compensate for the lowering of validator emissions.
Hey, thanks for the proposal! I’d like to share some thoughts:
It would be great to roll things out in an orderly way and validate our assumptions as we go. For example, we could first test the impact of the liquidity DAO before fully committing to funding it. Also, it might make sense to separate the supply changes into a different proposal.
Long-term support for public goods is important (e.g., ensuring a stable price for liquidity). As we move forward, we could define all the public goods we want to fund—such as protocol maintenance or ecosystem marketing. Liquidity provision is just one piece of the puzzle and likely won’t be effective on its own. Instead of allocating 33% of the new supply to a single purpose, we might consider a more flexible approach, where we regularly decide on the distribution across all public goods (e.g., X% to liquidity, Y% to protocol maintenance, etc.).
Regarding liquidity DAO governance, I believe it should be kept simple—perhaps with one director and any number of supporting contributors. However, I’d like to ensure that we maintain and strengthen the existing governance mechanism for token holders. We already have a community fund, so it might be a good idea to allocate a significant portion of the issuance to it. Funds could then be requested from this pool for different purposes (e.g., liquidity, Dev DAO, etc.), ensuring a more balanced and adaptive allocation. This adds a bit more complexity but could offer a more sustainable long-term solution—especially if liquidity operations don’t perform as expected.
This all makes good sense to me. I think taking tokens from existing emissions and adding them as incentives to liquidity is a great idea. Aerodrome + Klima supporting with votes seems like a really positive situation. I’m down.
Draft of actual proposal language. Please take a look at the document and let me know if you have any suggested changes.
The way we achieve the 33% to the Liquidity DAO is not ideal, but it will work. There are code upgrades already in the plans that will make this more straightforward down the line (Regen Ledger v0.47 and CosmosSDK v0.53), but for now we have created a functional workaround.
There have been significant changes related to this discussion, including the fact that we were turned down by Aerodrome to whitelist our token and that Klima Foundation backed out of their suggestion to support us.
That being said, the impetus behind this proposal and the need for a Structural Liquidity Upgrade are still as important as ever and continue to be discussed.
I will post a new discussion topic that basically carries this thread forward into an updated and revised thread.
Once I post it, I’ll add the link here.