TELxIP: Expanding to Base Network and Reducing Inefficiencies

Council Proposals TELxIP
1

Abstract:

This proposal aims to expand TEL token liquidity to Base Network in order to

provide widespread access to the token, while increasing the efficiency of our limited TEL resources, and aligning with both the uniswap and base communities through the production and consumption of shared markets using their infrastructure. In practice, the proposal involves deprecating the TEL/DFX/USDC staking contract and rewards, and then allocating those rewards to a new staking contract designed for the new TEL/ETH uniswap V4 pool on the Base Network.

The Problem: Fragmentation of Liquidity and Existing Inefficiencies

  1. The Current Liquidity Scenario:

  2. Polygon: approximately 95% of liquidity in the TEL token is based on Polygon network and exchanged on a single DEX, Balancer. Balancer is relatively much smaller than its competitors

  3. Ethereum: There is approx 10% of liquidity based on Ethereum Mainnet exchanged in a Uniswap concentrated liquidity V3 TEL/ETH pool. This pool has seen tremendous yield with no incentive.

  4. Inefficiency with TEL/DFX/USDC

  5. Liquidity: Nearly $400k in liquidity

  6. Volume: Trades only $20k volume,

  7. Trading activity: Most of which is between TEL/USDC.

  8. Trading pair market cap: DFX has a CMC of 3797 and only trades $6k in daily volume.

  9. Conclusion: Relative to other pairs and objectively, this TEL allocation is an inefficient use of limited TEL resources.

  10. Proposed Solution:

  11. Deprecate the TEL/DFX/USDC pool on TELx and

  12. Allocate those TEL incentives to bootstrap liquidity on Base network in a Uniswap V4 TEL/ETH LP.

Functional Specification:

  1. Token Mapping: The TEL token has been mapped to Base Network.
  2. Pool Creation: A Uniswap V4 pool with TEL/ETH has been established.
  3. TEL Rewards: In order to bootstrap additional liquidity to provide Base users better price execution for TEL trades, 2,777,778 TEL per 30 days will be issued to a new staking contract designed to incentivize LPs.
  4. Deprecation: The current TEL/DFX/USDC pool on balancer will no longer be incentivized.
  5. Allocation: That issuance will now go to the newly established Base TEL/ETH pool.

Rationale:

TELx council is focused on increasing liquidity and access to users across the crypto economy. Base network has proven to be a high volume network with millions of users that currently have no access to TEL in their ecosystem. By incentivizing TEL LPs to bridge and provide liquidity on Base we can dramatically increase our surface area and tradable liquidity.

Of course there is a potential side benefit of liquidity on Base network. Coinbase would have meaningful data and access to TEL liquidity in the event of a central exchange listing.

Why deprecate TEL/DFX/USDC? Frankly it does not trade meaningful volume. The pool has near $500k in liquidity and only trades $20k volume, most of which is between TEL/USDC. DFX has a CMC of 3797 and only trades $6k in daily volume. It is objectively not a useful trading pair for TEL.

Technical Specification: [Draft Pending Discussion with TAO]

  1. Deprecation: The staking contract for the 2,777,778 TEL per 30 days for DFX pool will be deprecated by the TAO according to standard practices.
  2. Base network functionality: This pool requires implementing Base Network functionality into the TELx interface. Will discuss with TAO for them to help budget, specify, and implement either on its own or by contracting with approved services providers as it deems necessary or appropriate.
  3. New staking contract: A new TEL/ETH uniswap staking contract will need to be created for LPT staking and rewards claiming on TELx.
  4. Website design: Work will also need to be done on TELx website to deprecate the DFX pool and display the TEL/ETH Base pool. Will need discussion with TAO to conduct feasibility, then either implement or outsource.

Implementation:

  1. Creating the pool: The work to map TEL to Base and set up a pool has already been completed (https://app.uniswap.org/explore/pools/base/0xb6d004fca4f9a34197862176485c45ceab7117c86f07422d1fe3d9cfd6e9d1da)

  2. Meeting with the TAO: The Author schedules a meeting with the TAO to scope out the work, tasks, and implement the following description of work.

  3. Description of Work:

  4. Deprecation: The staking contract for the 2,777,778 TEL per 30 days for DFX pool will be deprecated according to standard TELx practices.

  5. Base network functionality: This pool requires implementing Base Network functionality into the TELx interface. Will discuss with TAO for them to help budget, specify, and implement either on its own or by contracting with approved services providers as it deems necessary or appropriate.

  6. New staking contract: A new TEL/ETH uniswap staking contract will need to be created for LPT staking and rewards claiming on TELx.

  7. Website design: Work will also need to be done on TELx website to deprecate the DFX pool and display the TEL/ETH Base pool. Will need discussion with TAO to conduct feasibility, then either implement or outsource.

Transactions:

Described in implementation above. In addition, we will need a quote for contract work for smart contract and web development.

Total TEL Distribution

  • Source of Funds: TELx Council Safe
  • Rewards: 2,777,778 TEL every 30 days harvested pro-rata from the TEL/ETH staking contract.
  • Development Costs: Pending budgeting conversations with TAO.
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