Solvent SRM Grant Proposal

Hello everyone,

I am Aditya from Solvent Protocol bringing you a proposal for a $SRM grant for liquidity mining for NFT pools.

Introduction to Solvent Protocol:

Solvent is a platform which turns NFTs into fungible tokens and allows a whole world of possibilities. The foremost proposition is the ability to sell NFTs instantly using our buckets (collection specific indexes) in exchange for droplets (index specific fungible token). The index tokens track the floor prices of the NFT projects. These fungible tokens can then be traded on Atrix or can be used to provide liquidity in the pools.

Our goal with Solvent is to improvise the capital efficiency when trading NFTs enabling various financial instruments to the NFTs so that they’re truly an asset class. The index floor price from Solvent NFT tokens, can enable many financial instruments such as lending, collateralized loans, and perpetuals.

To take an example:

Suppose you own an Degen Ape NFT and you wish to get some liquidity off that NFT. Instead of listing the ape on marketplace, wait for a buyer, negotiate the price, with Solvent you can:

  1. Visit the Degen Ape bucket on app.solvent.xyz
  2. Exchange the NFT for 98 $DAPE tokens that represent the running floor price of Degen Ape project on Solvent (2% is charged as platform fee)

PS: The platform doesn’t consider rarity in picture in the current version, and mints the same number of tokens for any NFT deposited.

  1. Visit Atrix and swap the $DAPE tokens for USDC/SOL

OR

  1. Deposit $DAPE and $USDC in the liquidity pools to earn trading fee and farming rewards

Currently, we have 7 buckets in total but we plan to make the bucket creation permissionless very soon. ETA – 2 weeks.

Why do we need $SRM and how much do we need?

Currently, to incentivize the LP, we use farming rewards in terms of $SVT (our governance token) but it is not enough in terms of dollar value. At the same time due to our tokenomics, we do not have enough bandwidth to increase the rewards in the LP considering we want to incentivise other applications for the droplets which in turn will increase the distribution and hence bring more liquidity to the Serum markets via Atrix.

We have a TVL of approx. $550K at the moment and to substantially increase it, we need the following:

  1. Higher farming rewards for droplet pools on Atrix.
  2. Further applications for droplets.

We have a major integration coming with Solend which will enable first ever NFT lending on Solana with the help of our droplets, but to incentivize that we need $SVT as rewards.

So, what are we proposing?

We propose moving a portion of our $SVT rewards from Atrix to Solend (considering we only have enough tokens as per our tokenomics design) and replace the $SVT rewards by $SRM rewards on Atrix.

We want to ask for a total of 500,000 $SRM which will be distributed to the LPs over a 12 weeks period.

The rewards for each LP will be calculated at the start of each week on the basis of:

  1. Market Cap (50% weight)
  2. Trading Volume in terms of dollar value (50% weight)

We believe that NFT lending is an exciting and ground-breaking financial instrument that will be the first of its kind on Solana. We think that it is quite important to leverage this opportunity to make a significant impact with this launch as we might not get second chances. Our core vision with Solvent is to make NFTs more capital efficient to trade and introduce financial instruments to them. Lending is just a first step in the right direction. If we do it right, it can kick off something big. We need and will appreciate all help and support from the Serum DAO in making history with us.

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Hey, Rooter from Solend here. Chiming in to express support for this proposal.

We plan to support Solvent droplets on Solend, and good liquidity is essential for a good UX and for security. Getting Serum’s support here will help a lot in making the launch of NFT lending a success.

This aligns with Serum since all of the droplet liquidity will be on Atrix and therefore Serum, making it the defacto DEX for trading fungible NFT tokens.

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To provide an update:

We currently have around 16 buckets and permissionless bucket creation has been started. Now anyone can go ahead and list a collection on Solvent.

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It has been over 8 weeks since we received the grant and felt that it would be a great time to share an update.

The following is the trading volume over these 8 weeks:

Week 1: $342,524
Week 2: $466,178
Week 3: $529,578
Week 4: $522,708
Week 5: $523,221
Week 6: $467,606
Week 7: $1,008,214
Week 8: $213,745

Total Volume: $4,073,774

We believe the volume can be substanially increased but not immediately. There are few integrations to be made which will allow users to build on top of our floor index tokens and hence we are actively working on making our contract open source.

Additionaly,the volume also be increased if the slippage could be reduced which is possible with the help of a CLAMM and the absence of one on top of Serum hinders the adoption of Serum markets.

Our plan right now is to keep on building with our heads down, and build out additions which will increase adoption for these droplets, one of which we recently annouced, called as “NFT Lockers”.

The new smart contract is under an audit from Ottersec and this will trigger an migration which will lead to migration of the liquidity pools as well.

In the end, I just wanted to thank the DAO for the grant and support. I would love to answer any questions about Solvent or any other discussion anyone wishes to have.

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great of you to update the community like this, thankyou

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We believe it is important to be transparent and for that, we have been maintaining a spreadsheet with rewards distribution and criteria calculations each week.
The sheet has now been also updated with solscan links so that is easier to find on-chain transactions.

Link: Solvent $SRM yield farming reward emissions - Google Sheets

In case of any questions, feel free to ping me on discord/Twitter.