$DECATS & QuickSwap

Dear #DeCats community,

as you already might know, we are working on a second DEX listing for our beloved $DECATS coin - also at the request of the community.

The wish of many community members is a pool on one of the leading DEX's on the Polygon PoS chain, QuickSwap. We are in contact with the QuickSwap team and have discussed a few options, which I would like to present below.

First of all, however, a basic piece of information: an incentive for liquidity providers on the part of QuickSwap, as we have it reached with our launch partner VirtuSwap, is only possible with QuickSwap from a TVL of >100k $, a daily trading volume >10k$, official token security audit and then also only on the V3 (concenctrated liquidity) pools or GAMMA pools (automatically rebalanced V3 pools).

The free, unlocked team liquidity amounts to around 30-35k, depending on the price, so we can certainly get to 50k quickly and the 100k doesn't seem impossible. In any case, the team will migrate the unlocked initial liquidity (remaining 50%) from VirtuSwap to QuickSwap and lock there, as it has already done with 50% of the initial liquidity on VirtuSwap.

Here are the options we currently have with QuickSwap:

  1. Classic V2 pool without farming incentive

    This is basically the same as what we have actually with VirtuSwap, but without incentives from DEX. However, a migration of 50% of the initial team liquidity (including fixed locking) to a classic V2 pool at QuickSwap would be the easiest way.

  2. Classic V2 pool with farming incentives from the $DECATS team

    QuickSwap additionally offers us the possibility to incentivise a V2 pool for liquidity providers from our own (team) pocket. This offers the advantage of possibly attracting liquidity providers and token holders outside the core #DeCats community.

    If we were to choose this option, we would of course, for reasons of fairness, grant our launch partner VirtuSwap the same budget from the team treasury, which would lead to a) a smaller team budget (e.g. effect on airdrop, but also on other future marketing activities) and b) a corresponding increase in the APR for our pool at VirtuSwap.

  3. Concentrated Liquidity Pool (V3) direct from QuickSwap

    Some of us may be familiar with the system of concentraded liquidity pools, but we would like to explain it here for those who are not deep down the DeFi rabbit hole.

    Simply explained, liquidity is not provided for the entire range of possible prices. For example, liquidity can be provided for a “concentraded“ price range from $15 to $100. If the price falls below $15, then you have 100% $DECATS in the pool. If the price rises above 100$, then you have "sold" all $DECATS via the pool and only have stables in the pool and no longer participate in AMM trading (no more APR). The system itself is clever and generates more APR from trading, but as an LP provider you have to be aware of the effects (possible increased impermanent loss effects = IL).

    From our own experience we would rather prefer this system with a crypto-crypto pool (such as $DECATS-WETH or $DEATS-WMATIC), as here the effects of the IL are somewhat more limited, provided $DECATS rises with the market (=expected crypto market bull run in 2024/2025).

    However, the initial team liquidity could still be migrated and provided in a very wide range, e.g. price range 1$ to infinity, and other LP providers could define their own price range and provide liquidity with a correspondingly significantly higher APR than the initial team liquidity.

    It is conceivable that in the future, when we reach a liquidity of at least 100k on this pool, we could also receive additional incentives for liquidity providers from QuickSwap (t.b.d.).

  4. GAMMA Farms (automatically rebalanced V3 liquidity pool)

    As a further option, QuickSwap offers us the latest and most advanced model in the “liquidity providing business”: GAMMA Farms. The model is basically based on a concentradet liquidity pool (V3) as just explained, but is constantly and automatically "rebalanced" by GAMMA (gamma.xyz).

    This means you don’t need to be aware of the price range you provide liquidity, but it will be adjusted constantly by GAMMA technology.

    It is a very good option for liquidity providers who are interested in providing liquidity in the long term and can withstand rebalances (i.e. do not panic immediately when a rebalance occurs - it can go two ways over time). The system also offers the advantage that trading fees received are automatically reinvested in the pool (auto compounding = higher APY).

    Here, too, the clear recommendation: if we choose this option, then better as a crypto-crypto pool such as $DECATS-WETH or $DECATS-WMATIC. And furthermore, with this option it is also conceivable that if the pool size reaches >100k TVL, we could receive incentives for liquidity providers from QuickSwap (t.b.d).

We will be conducting polls (in the Telegram group and on DeBank) over the next few days to understand which option our potential liquidity providers prefer and then talk further with QuickSwap, set up the new pool on QuickSwap and lock the remaining 50% of the initial team liquidity on the new QuickSwap pool as fast as possible.

Yours sincerely,

Chairman Meow and the #DeCats team

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