Spend Proposal: Margined protocol sqSCRT liquidity deal

The above proposal was just edited to add information RE potential signers for the multisig and management conditions of the liquidity. We are still expecting a performance analysis of Margined after which I intend to put this proposal on the chain early next week if there are no further comments.

I will be available on the community call happening tomorrow 1500 UTC to answer any questions about this proposal as well.

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It would be great if the proposal also committed to giving SCRT stakers direct power regarding controls of the funds once sdk0.50 comes to secret, instead of it needing to be asked later or settilng for a “just trust us” approach. It would go a long way to raise the bar. If not, then it would be good to hear why not.

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Fully leveraging sdk0.50 and giving governance more ownership is very important and one of the core features of this release that I agree with we should use. I added a statement of intent as an edit to the proposal.

Edit: I just wanted to mention that i think its best to do the proposal now and not wait till after sdk0.50. The migration of funds would then hopefully be somewhere in Q2.

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Much appreciated! And I’m also not suggesting a delay, a migration later is a good commitment.

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Sure - so LPing a sqASSET gives an exposure much similar to ASSET^{1.5}.

If we are able to get good price discovery and have a fairly efficient market, like we see with sqTIA, then this can be achieved.

Note, that the object of the LP position (hopefully) is to have more venues for price discovery of SCRT throughout crypto not just outright pnl.

We think that we can ensure additional improvements of liquidity by launching in tandem with our delta neutral strategy. Additionally with sqSCRT LPers of SCRT more generally can hedge their position using our hedgehog strategy.

What has the performance been in the past?

For the sqOSMO pool we have seen yield in APR terms of 7% on LP positions and in the sqTIA market it has also been positive.

However, we have been reducing the size of LP positions we have been providing over time and didn’t do a good job at recording what the PnL was.

Potentially I can give further details on short positions but for some more technical details please see here.

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Margined has made their script to work with Authz, The multisig is finalising the setup and is then expected to put this proposal on-chain.

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