Anyone opposed to this? Anyone in favor? 

Could you break down your rationale for why you are proposing this/why you think that it is a good thing? Why someone might disagree? I'm not opposed, but I haven't spent a lot of time thinking about this

[@7NLw...Yyxc](7NLwhR18UcrxJFeacBgT33BPnSYFc4SnWPvUFCb1nyyVYyxc-hydradx) 
Here is what I wrote on the discussion thread. Let me know if you would like some additional explanation on any of these.

**Reasons to increase:**
- Attract larger investors
- Increase volume to market cap ratio
- Reduce volatility
- Attract CEX listings
- Omnipool is advertised as deep liquidity ocean

**Reasons not to increase:**
- Creates exit liquidity
- Reduced price increase per dollar invested
- Treasury will lose HDX



As Omnipool is essentially the solo market for HDX, I think it's important that we grow our liquidity here as our prominence grows - tools such as Split Trade are less effective for HDX as there isn't really any way to arbitrage the price back to "equilibrium".

There are currently 60M HDX in the Omnipool, and 314M HDX in the Treasury (plus 32M unsold bonds) **and another ~1.7 BILLION HDX** in the growth portion of HDX token supply - so I think a +50% increase or ~30M HDX would be reasonable personally.

[@lolmcshizz](7Ljigfve9PdRqvSjiRGUjVf37rbX3n89ZmaitD2hQQhtLBMN-hydradx) 

That all makes sense, thanks for explaining. Is there any disadvantage to having such a large portion of the liquidity be POL? None that I can think of, just curious. 

Also, I am wondering about what impact it would have if the price of HDX runs up 5 or 10x relative to other assets in the omnipool and we have already increased the number of HDX in it. This would result in a very large portion of the total TVL being HDX, which I believe is not ideal - correct?  

[@7NLw...Yyxc](7NLwhR18UcrxJFeacBgT33BPnSYFc4SnWPvUFCb1nyyVYyxc-hydradx) Even with a +50% increase in the protocol HDX position, HDX would still be a small portion of omnipool's overall liquidity.

The answer to the your other questions is actually a bit complicated - maybe [@lolmcshizz](7Ljigfve9PdRqvSjiRGUjVf37rbX3n89ZmaitD2hQQhtLBMN-hydradx) can do a better job - but I will attempt to answer. 

Having the price of any asset rise 5-10x on low volume has the potential to be 'bad' for the omnipool because it creates a lot of unrealized impermanent loss (IL). If liquidity providers then go and sell the LRNA generated, it increases the HubAssetImbalance, which is a metric that measures how far off the value of LRNA is from what it would need to be to completely cover impermanent loss. The best time to sell LRNA is when HubAssetImbalance is zero, as doing so will almost completely cover IL. 

Whenever any trade happens there is a normal asset fee, but there is also a small protocol fee. The small fee goes toward restoring HubAssetImbalance to zero. So the omnipool works best in situations with high volume and no price change. During these periods, HubAssetImbalance can hit zero and the protocol fee is redirected toward bidding HDX. 

Getting back to your question - Increasing the amount of HDX liquidity is likely to help all omnipool's liquidity providers, because it will increase the volume to price change ratio of HDX and thereby reduce overall IL. This point is somewhat moot because almost all HDX LP is protocol owned and the general consensus is to just let the treasury eat the IL until such a time comes when the omnipool has much greater volume. 

Keep in mind that if the price of HDX on omnipool were to go up by 5-10x, almost all of the HDX in the omnipool would have been removed. So there is a bit of balance between price increases and the total value locked. Price increases raise total value locked, but they do not happen in a vaccum, they only happen as a result of the asset being removed from the omnipool, and that removal decreases the TVL. 


As of now, is there a current need for this update? I would like to know more on the reason. 

[@7J4Y...hCZd](7J4YV1BXqy8ajygAFgFmN6sewcjqA316n99Tzvez4r2zhCZd-hydradx) 
I think parachains are seeing attention from large investors right now. Evidence for this can be seen in the recent melt-up across several parachains. Our own on-chain data shows an uptick in large sized transactions onto Hydra in the last couple months. 

Large investors want to be able to drop a few grand or a few million into a project without sending the market cap above bitcoin due to low liquidity. DCA is great, but its advantage is contingent on people counter trading you. We actually have people front running large DCA trades (I am guilty of this). 

Imagine being a hedge fund or large investor who just learned about Hydra, believes in the value proposition, and wants to establish a significant and influential bag. Some of the non-team council, has >30M HDX positions, and they are by no means what counts as ‘large investors’ in the crypto world. Establishing large positions was easy at launch because we were able to counter trade people like B27 :soicry:, but today, the majority of large non-believers have already left. 

If a large investor wanted to come and scoop up 60M HDX before others notice Hydra, it’s not practically possible with only 75M HDX LP. They would need to split it into small trades, micromanage them to avoid DCA front running, and they would need to continuously monitor to make sure enough counter trading (dumping) was happening such that HDX market cap wasn’t being sent to unsustainable levels. Many large traders don’t have time, interest, or expertise, for doing this. 

Moving to CEXs. I think we would all like to see HDX listed on more major exchanges. When exchanges make decisions about listing random shitcoins, in addition to considering security and scalability, they like to see a high volume to market cap ratio. High volume implies the CEX can make money on fees. The way to increase our volume is to increase liquidity and reduce price impact. Coinbase and Binance both explicitly say they consider market supply when deciding new listings. It’s unlikely we get listed on these exchanges with just $1.5M of liquidity that has a 2% slippage rate for less than $20k. 

In summary, I believe now is the time because large investors are giving attention to parachains, and I worry we will be passed up by many due to our relatively low liquidity. 


[@amphibiousParakeet](7KejvRw4GZvVjFQEDefAsBRd9iaTjVeUWczB44Mgu8Bue8JW-hydradx) 

I understand. 

I believe the new referral program and the DCA options will also help with the volume. Being they are new features, they are still being discovered by users. I do see the update as a good idea in the future and something we should do.

I would say no for now, but I do believe we should identify a market cap level to start implementation.  I am thinking around $200 million or higher market cap. (coinmarketcap has us at 99 million - self reporting)

Investors will also look at the value of the coins percentage gains over a hr, day, week, and month.  The hdx coin not having major volatility during this period of btc market manipulation is a positive. After the bitcoin halving and as we march further into the bull-run, I would love to make this update at a higher market cap. 

When you do your updated proposal, please state your reasoning. You do have solid points to consider. 

[7MdhKzwvPmvkNv1PQThTPMQLWrxBgKMqcwAJe6EEV2P9uNDv] - Do you have the time to share your thoughts on additional POL HDX LP not being the right decision at this time? 


[@amphibiousParakeet](7KejvRw4GZvVjFQEDefAsBRd9iaTjVeUWczB44Mgu8Bue8JW-hydradx)
Is HDX liquidity too low? I would say so. But even lower is the liquidity of ASTR, INTR and CFG compared to their volume and we should keep some balance and also adapt in smaller steps.

The Omnipool asset composition is crucial, especially when it comes to HDX. This involves taking into account both the TVL and the trading volumes of each asset. Given a comparison of the weighted TVL/volume ratios, a ~15% increase in HDX liquidity appears to be a more reasonable adjustment, which I would support, along with any other reasonable calculated increase.

The test should be conducted in Chopsticks.

Would be great if the proposal is more detailed. 

[@7P5c...Phi3](7P5cxiXb1xRPrpcDphLvTy9dAvHB4mjH2uQsXeNoumHvPhi3-hydradx) It would

[@7P5c...Phi3](7P5cxiXb1xRPrpcDphLvTy9dAvHB4mjH2uQsXeNoumHvPhi3-hydradx) 
The proposal itself is just testing that I can create a public governance proposal without screwing anything up. It does basically nothing. It adds 0.000000000001 HDX LP to the omnipool. 

Are you looking for an explanation of why I intend to propose adding additional HDX LP? If so, there is a discussion thread, discussion in the discord governance channel, and discussion in the other comments here. 

[@7KHJ...GoRu](7KHJ5iQXsQrEW2BrZGTnc3fS9S2qJw189TbyZHLWdvbxGoRu-hydradx) 
Are you looking for details as to what this proposal does, or why I think we should add additional HDX LP ?

I don't understand why this is necessary? Omnipool was invented as a tool against whales, why should we abandon this idea?

[@VLADY LIMES | PROMOTEAM](7NaMA63jMwq73dZXQtShsU67GhfaPJDhrWjkj2oFxn13rg9j-hydradx) What do you mean by 'omnipool was invented as a tool against whales'? 

We intend to attract whales via trading efficiencies that omnipool and hydraDX chain offer. I am not aware of any effort or design intended to discourage whales. 

I voted no, I don't think it is the best time to increase the position of pol hdx lp.
By increasing it now, more capital will be needed to grow the value of hdx, better to do it when the price is higher

[@7JpX...VVrF](7JpXZTArqHtvRvLmz2rumEhUmgnKsLrzLp4druKeq5cQVVrF-hydradx) By this logic we should remove all HDX LP. Then we can just add $10 worth of capital and let our marketcap surpasses bitcoin and gold combined. Add the POL HDX LP then, and we can all exit as billionaires! 

[@amphibiousParakeet](7KejvRw4GZvVjFQEDefAsBRd9iaTjVeUWczB44Mgu8Bue8JW-hydradx) 
liquidity now is quite good, those who want to buy can do so very well without spiking the price as I did. later we could do two things, increase the pol hdx lp, remove and add the current hdx positions by aggregating them and take lrna for future purposes.

[@amphibiousParakeet](7KejvRw4GZvVjFQEDefAsBRd9iaTjVeUWczB44Mgu8Bue8JW-hydradx) 
also given the composition of the omnipool by adding now and assuming 2x growth in the value of hdx we will become virtually the most valuable market within the omnipool. I as I said am against an increase now.

[@7JpX...VVrF](7JpXZTArqHtvRvLmz2rumEhUmgnKsLrzLp4druKeq5cQVVrF-hydradx) You have to take into account that for the price of HDX in omnipool to 2x, HDX would need to be removed, thereby counterbalancing the price increase (when it comes to total value locked). We could do the math if necessary, but HDX would not have the deepest liquidity unless we continued adding HDX to make up for what was removed. 

With regard to HDX liquidity being good as is, I will have to respectfully disagree. 2% slippage for $20k invested, when that 20k is applied across all available markets, that is memecoin numbers. 

Omnipool will never reach its potential in this scenario. 

[@amphibiousParakeet](7KejvRw4GZvVjFQEDefAsBRd9iaTjVeUWczB44Mgu8Bue8JW-hydradx) 
I didn't express myself well or you didn't understand. Adding liquidity now and assuming the price of hdx doubles due to favorable market conditions, it will become the most liquid asset and it is not favorable to outside eyes that a market cap of 100M is more liquid than dot for example. Waiting instead for the price of hdx to increase we could consider and calculate the addition more accurately in one go, also we could remove all the current positions of hdx that will have suffered even more impermanent loss getting lrna for the future.

[@amphibiousParakeet](7KejvRw4GZvVjFQEDefAsBRd9iaTjVeUWczB44Mgu8Bue8JW-hydradx) 
we put about 84 million hdx in the omnipool, now the positions have turned into 51 million hdx and 14500 lrna. I would wait for an increase in the price of hdx (e.g. to 100 million mcap), put in at once for example 100 million hdx, remove all existing positions getting lrna and the remaining hdx.

[@7JpX...VVrF](7JpXZTArqHtvRvLmz2rumEhUmgnKsLrzLp4druKeq5cQVVrF-hydradx) I apologize if I did not understand and if my prior response was a bit cheeky - it was late at night my time. 

I have two issues:
-Can you explain to me why HDX being the top asset by liquidity would be a problem? 

-Can you help me understand how you determined 2x price increase in HDX after adding +50% liquidity would result HDX being the most liquid asset on omnipool (measured in dollar terms I assume). 

Simplifying the omnipool to a xyk (keeping LRNA price stable), I calculate the liquidity value would increase by 41% if the price of HDX doubled. Keep in mind measuring liquidity in dollar terms is a bit problematic, but we would start with about $2M HDX liquidity and end with $2.86M. The number of tokens would go from roughly 86M HDX and 56k LRNA to 61M HDX and 80k LRNA. 

Again, I have simplified by keeping the price of LRNA stable, but that is not going to impact it much. Whatever asset was spent to buy the HDX, the value of it's pool increased by >$800k. 

Since DOT's pool is currently $4M, the HDX pool would not be the largest. 


[@amphibiousParakeet](7KejvRw4GZvVjFQEDefAsBRd9iaTjVeUWczB44Mgu8Bue8JW-hydradx) 
1- not a problem, just a fact of marketability
2- prices and calculations are approximate

again in general I disagree, but if you want to increase liquidity you have to do it in one go and removing all the current positions so that lrna is accrued to the treasury. So the process should be to put in for example 80M hdx and remove all the others.

[@amphibiousParakeet](7KejvRw4GZvVjFQEDefAsBRd9iaTjVeUWczB44Mgu8Bue8JW-hydradx) 

I changed my vote to yes, although I do not completely agree with the choice there are some interesting points to be developed. As I have already written several times the addition of liquidity must be followed by the removal of all current hdx positions. Currently these positions have the most IL and are compensated with about 14500 lrna. Removing these positions from the market will make it easier to reach 0 of the hubassetimbalance and consequently the omnipool, the various LP, hdx prices, would benefit.


Great info for those that responded. I appreciate all the detailed information. 

This is not a fully formed proposal. I voted no. 

not because i am against the idea, i just don't understand what I'm voting on here. Are you using the governance on-chain votes to ask a question? like "am i doing this right" 

am i voting no to say you're doing it wrong? 

I think this needs to be reworded and if you are using this to ask yes or no questions i think you might need to find another forum for that. 

**7KKbq3n8P2RXvoLbsc7mdFF2CvaQmhS3DHt8ksBvMGHEXiCg** big vote no. Would you have time to explain? 

Testing: 1, 2, 3?

**Do I know how to make a proposal without harming anything:**

If you click the Call data at the bottom you can see what this does. 
1. It raises the asset cap on currency 0 (HDX) to 200000 permill (20%). 
2. It has the treasury add 0.000000000001 HDX LP (1 * 10^-12)
3. It lowers the cap back to 20000 permill (2%)

If I didn't break anything, I intended to increase the POL HDX LP amount in a subsequent proposal.

Edit: 
Please let me know if you do NOT WANT additional POL HDX LP added. If you DO WANT more POL HDX LP, how much do you thing is reasonable. My current thinking is ∼+50% 


SubSquare is testing a proposal and wants to make sure it doesn't harm anything. 
The proposal raises the asset cap on currency 0 (HDX) to 20% and has the treasury add a small amount of HDX LP. 
The cap is then lowered back to 2%. 
SubSquare plans to increase the POL HDX LP amount in a future proposal and is asking for feedback on how much to add.

Governance Test - for adding additional POL HDX LP