AIP #28: DWF Labs $SPELL Token Loan and Purchase Plans

Governance Proposals Voted Proposals
1

AIP #28: DWF Labs $SPELL Token Loan and Purchase Plans

Summary:

In the past few months, Defi has been thrown with multiple curve balls and the total TVL on Defi has almost reached a 3-year low. We strongly believe that Defi is the way forward and Abracadabra has been resilient over the course and has proved itself to be an integral part of the entire Defi ecosystem.

However, while much of the focus in discussions around liquidity and trading often revolves around DEXs, it’s pivotal to realize that a comprehensive solution requires considering both CEXs and DEXs.

Abracadabra’s current emission model solely targeting DEX liquidity, paints an incomplete picture as they leave out the significant volume and influence of centralized exchanges. Recognizing this gap, with our capabilities and experience in liquidity provision and active trading on CEXs, we are committed to a long-lasting partnership with Abracadabra.

Our aim is to enhance liquidity for SPELL across both Defi and centralized exchanges by requesting a 4,620,000,000 SPELL (1.8m USD) token loan and a 1m USD worth of token purchase at a 15% discount, locked for 24 months coming from future SPELL emissions budget

Who is DWF Labs?

DWF Labs is a crypto native investment firm and market maker, seeking to support bold founders who want to build the future of Web3 and ecosystem. DWF Labs is an affiliate of Digital Wave Finance, one of the world’s leading high frequency cryptocurrency trading firms founded in 2018, which is trading on more than 60 exchanges, CEXs and DEXs.

Since inception, DWF Labs has worked with more than 260 projects and provided customized ecosystem support, a few selected partnerships:

Alongside with investment and market making, DWF Labs also provides support on Defi liquidity, token design, PR/Marketing, exchange listings, code and security audit. We aim to be a true ecosystem partner.

Specifications:

Given the recent unfolding of the crypto market, we strongly believe that DWF can improve SPELL liquidity on the different CEXs it is listed on. In order to execute this liquidity improvement, DWF proposes a loan-option model, standard industry practice for market making firms.

The SPELL loan period will be 24 months and DWF Labs will be providing a 5% annualized interest payable every 4 weeks with stable coins. The market making will be live on SPELL pairs across different CEXs, with the relative expected liquidity depths:

  • Binance: 100k$
  • Bitfinex, OKX, Huobi, Bybit: 40k$
  • BTC Turk: 50k$

Call Option Type: European (can be exercised only AFTER the end of the loan period).
Strike Prices will begin from 120% to 400% of spot price on the day of receiving the loan.

The SPELL tokens mentioned in this proposal would come from the DAO future emission budget, as they would be used to affect CEXs liquidity for SPELL.

Token Purchase:

Additionally, our proposal sees the potential in a strategic investment in SPELL, to further align DWF Labs with Abracadabra success. As a strategic partner, DWF Labs will fully support Abracadabra growth efforts.

We will use the 24h TWAP as base price to purchase the 1M USD worth of SPELL tokens at 15% discount with a 24 months lockup period, the lockup contract will be provided coordinating with the DAO.

The 1m in stablecoins will be sent to the DAO treasury to be used for normal treasury operations, if this proposal was to pass.

Next Steps:

A snapshot vote will soon be put up in order for this proposal to be voted on! The current proposal is now open for discussion as AIP #28.

Snapshot vote is now posted, and will go live on 11/09/23 at 16:00 CET. It will last 72 hours and can be found here.

The proposal has passed.

2 Likes
2

Very interesting proposal, and something that was long needed for SPELL. A couple of personal points about it!:point_down:t2:

  1. I strongly support the need to invest resources and efforts in improving SPELL CEX liquidity. Since its inception, SPELL presence on large CEXs such as Binance, Coinbase, Bitfinex etc has been a fundamental part of our success. In the last year or so, the market making effort has suffered a steep stop following the bad experience with SPELL previous market makers, I am extremely happy to see this proposal from a respected and growing firm like DWF be posted now, so that this effort can start again.
    DEX and CEX liquidity are two faces of the same coin, fosucing on only one of these as it happened in the past is not a good strategy. DWF can help the DAO achieve the second face of this coin.

It is also imperative that deep CEX liquidity is achieved to avoid possible delistings, and judging from DWF’s other market maked tokens, they seem entirely capable to achieve this.

  1. In the last months I had the chance to speak personally with different members of DWF operations for topics related to liquidations and treasury management operations, and in any occasion they have demonstrated to be understanding and skilled players in the sophisticated market making world. Their originality and flexibility in building complex positions is what I believe really sets them apart from other market making firms.

Extremely bullish to see them having interest in aligning themselves with the Abracadabra DAO also on the market making side.

  1. I support both points proposed here. The market making agreement seems in line with industry standards, with a 24 months model that allows for a long term partnership. The locked token purchase agreement is also something extremely interesting and (in my opinion) positive. A SPELL investment from DWF not only gives more money to the treasury to hire new talents and boost the operational runway, but it also shows long term commitment and alignment between the DAO and their possible market makers.

Overall I strongly support this proposal, and I am excited to see what other DAO members think about it.

4 Likes
3

Thank you for the positive feedback. DWF Labs is extremely excited and committed to support Abracadabra’s growth efforts. We believe we will be able to value add in multiple ways too!

2 Likes
4

Strong proposal, genuinely , we appreciate your time and market making efforts and I look forward to hearing more discussion. I will assess DWF labs from a risk perspective to the extent I can , but I welcome a strong liquidity base in governance.

Of question , can you specify the interest payments details on the loan? Paid in USD or Spell ?

Thanks
Frog

4 Likes
5

The yield will be paid every 4 weeks in USDT but if there is a specific need for others, we are flexible.

3 Likes
6

Awesome proposal!!! Looking forward to the assistance that DWF Labs can provide!! Very cool to see a global multi stage investment firm from Dubai interested in Abracadabra.money!! Agree completely with Romy and Frog-E. Looking forward to seeing this vote pass in favor of DWF!! Lets put that magic to work witches and wizards!:man_mage::mage:

7

We very much look forward to working with the community from Abracadabra too and want to be part of the journey to success. Also, we are not just based in Dubai, but also Switzerland, Hong Kong, Singapore and South Korea :smile: LFG

1 Like
8

Growing quick!! That’s really cool! Should be a big help to abracadabra.money :call_me_hand:

1 Like