Core Team Proposal - PATHWAY Stage 0: Parameters

Pathway Stage 0: Parameters

As a result of the last voting, the community of Graviton approved a proposal called Pathway that stipulates the usage of its treasury assets for market making of the governance token GTON, in accordance with the parameters and expectations that seem realistic for the majority of token holders. Following this governance decision, the team began deeper research into the implementation of Pathway for Graviton.

At the moment, we envision a four-phase introduction of Pathway:

  • Semi-automated approach (Stage 0)
  • Automated approach based on a centralized backend (Stage 1)
  • Automated through smart contracts (Stage 2)
  • Automated through smart contracts and fully calibrated by the proposed algorithm (Stage 3)

Stages 0–2 are based on a so-called Lower Boundary logic. Prior to collecting enough data on the dynamics of the fundamental metrics of the project and the behavior of users and traders, it is difficult to estimate what the upper boundary should be, meaning that the market making team can only make decisions by apply ad-hoc heuristics which can be worked out via consulting with multisig members, advisors, ambassadors and the community of GTON holders in its entirety.

The implementation of Stage 0 involves optimizing a growth function and its parameters that most holders will see as an optimal goal for the current year.

It should be noted that the treasury resources are limited, and there is no risk-free profit. Accepting this specific proposal, we (token holders), as a DAO, acknowledge the risk of eventual funds’ shortage in the treasury. However, the team, community, ambassadors and project advisors are determined to do everything in their power to execute the plan to the letter, including its financial, market making, business and product development subgoals. Moreover, this experiment can always be halted if it doesn’t demonstrate favorable results.

This article describes the core part of the proposal, including the preparation as well as the three options submitted for voting and discussion.

Preparation

Two months ago, $1.5 mln was withdrawn from the Treasury to be used for market making of GTON in four blockchain networks: Ethereum, Fantom, BSC, and Polygon. Several markets with GTON were established, and today’s market overview is presented on the picture below. The data is being constantly updated, but as you can see, the basic liquidity is concentrated in stablecoin pairs, whereas the pairs to native tokens have lost value due to the recent market crash, which has also influenced the price of GTON.

In addition, there is a single-sided DODODEX pool with $1,569,261 in liquidity.

The basic premise of Pathway is to run Stage 0 without using the treasury funds, simply taking advantage of the exclusively available AMM liquidity.

The plan is as follows:

1 — withdraw liquidity from DODO (withdraw 80%)

2 — withdraw liquidity from Uniswap v3 (withdraw 50%)

3 — withdraw liquidity from PancakeSwap (withdraw 50%)

Since DODO and Uniswap v3 pools are asymmetric, it will yield about 500k USDC for the launch of Pathway Stage 0.

After an in-depth research, the Uniswap v3 model seems to be unusable for the purposes of farming and market-making automation, so the remaining 40–50% from Uniswap will be transferred to a Sushiswap pool (some liquidity will remain for arbitrage purposes and possible additional integrations).

Also, a part (30%) of Fantom liquidity will be migrated to Polygon.

With this configuration, we will launch semi-automated market making on Pancakeswap (GTON/BUSD) and Sushiswap (GTON/USDC) pools on BSC and Ethereum, respectively.

Parameters

To simplify the implementation as much as possible and ensure a quick launch of the production-ready release, it is suggested to start the system with only a lower boundary for GTON, that is, to only stabilize the price of the token when it falls below the planned trajectory. Currently, it is proposed to maintain an average daily increase of 1% in the project capitalization.

The 1% target is calculated based on research of the projects that are deemed successful in DeFi in several categories: oracles, AMM, crosschain tech.

However, sustaining this target growth is possible only if, along with the growth of capitalization, the fundamental parameters of the project will also expand, such as the number of users, holders, integrations and partnerships. By itself, the use of treasury without product development and marketing will result in high risks of wasting the treasury without any organic growth. Therefore, our primary focus is on organic exponential growth of all the fundamental parameters of the project listed above and beyond.

Options

We submit three options for community voting. Two of them signify that the proposal is accepted fully with all the described parameters and the Reject option means that the proposal and its parameters need to be revised after further discussion within the community and resubmitted with new parameters.

Option 1 — Everyday Buy Back (EBB): at a random time (to prevent frontrunning arbitrage and manipulation) of the day, a treasury buyback will occur so as to bring the price to the target price. If the price is higher than the target, then it is inactivated and postponed until the next day.

Option 2 — Irregular Weekly Buy Back (IWBB): on a random day, three times a week, at a random time of the day, a treasury buyback will occur so as to bring the price to the target price. If the price is higher than the target, then the procedure is inactivated and postponed until the next epoch.

Option 3 — Reject: not accepting the proposal (return to discussions, research and redesigning).

Options comparison

It is worth noting that there are differences between these options, as each has its pros and cons.

The advantages of EBB: the price correction occurs daily, which will result in a smoother dynamics when averaging. Also, this process is easier to analyze and interpret.

IWBB is a little more complex and can lead to greater volatility. However, in this scenario, the risk of manipulation by arbitrage bots or frontrunners is minimized. The project team is leaning towards the IWBB option , however we will accept the option for which the largest number of GTON votes were cast.

5 Likes

I will go for the IWBB option. I think that it should not make much of a difference because if we establish what we intend to reach, this should hardly ever execute as the price should not go below the lower boundary.

If you know that the pathway program will bring the price up to the lower boundary, investors will likely buy anyway once we go beyond this limit and on top enjoy the staking rewards.

I like the idea of EBB. Having a constant and removing some volatility seems like a nice change to the typical market volatility we’ll inevitably continue to see. Also, I get the sense that we’ll be able to see how effective this is at slowly stabilizing the increase in price over time rather than the other option.

Dear,

I vote this opt 2 with the reason as followings:

  1. per week buy back will we have enough time tot estimate the flow of buy/sell swap.
  2. 7 days per week = 24*7 = 168 candles H1, we will balance the treasure on this phrase inteadly per days with 24 H1 candles.
  3. IWBB & Stake = LP (passive income) will be make Holder in long term as well as make the price go up steadily.

Cheerful,

pls explain to me the quote. that mean, per week, we will choose 1 random day to buy 3 time. Or, buy three days per week.
Tks

It is 3 days a week of buys.

1 Like

I would vote for IWBB. However, I would like to ask if any MEV protection be implemented in the buyback as I’m worried that bots monitoring mempool would sandwich attack the buyback.

because in the proposal it says

“Stages 0–2 are based on a so-called Lower Boundary logic. Prior to collecting enough data on the dynamics of the fundamental metrics of the project and the behavior of users and traders, it is difficult to estimate what the upper boundary should be…”

I think that while it’s not possible to set up the parameters for the upper boundary, It’s ok with the GTON price is expected to just stay above the Lower Boundary price, not necessarily must increase steadily every day 1% exponentially in phase 0 until phase 2 starts or at least phase 1

Buyback time, amount and sellback are as important as price. There are many scenarios to be considered.

To increase the price 1% every time, the amount to be bought back may change.

After a buyback at 5$, if the price falls to 4,80$ (as general market), will the Treasury buy more at the same day (or next buyback time) to take the price to 5,05$? Or will it buy until 4,84$?

If the speculators drive the price up 30 days in a row, without letting the Treasury to buyback and sell huge amount at the 31st day, will the Treasury buy all selling pressure to increase the price 1% more than the day before, or let the market correct?

I think buyback time frame and price range should be kept private. It doesn’t have to be 1% every day. It may be kept in a price range X% up and down as IWBB states.

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I’m also a bit doubtful about the 1%-increase-per day. Sounds to ambitious to me. Anyway, let’s start with it and see how it works out. This will be an interesting experiment anyway, especially with respect to market dynamics / psychology: if traders now that a buyback to the 1%-per-day lower boundary will happen within the next days, not only selling lower doesn’t make any sense, but even buying below that threshold would be reasonable, which should lead to some buying pressure once we cross the threshold.

Additionally, in the future, i would like to see a bit more profound models than a simple 1%-per-day, e.g., like buying back to a random value between the MA and the upper bollinger band, where detailled parameter could be defined via governance (which moving average, k for the times of the standard deviation of the n period of the upper bollinger band, …).

Last but not least, i tend agree with the IWBB model, daily buybacks seem to be an overkill, easier to attack by arbitrageurs and a waste of fees.

1 Like

yes, we can start from that and after probably make “private” modeled decisions which can help to reach organic growth for all fundamental parameters