This proposal is to engage Peanut.Trade Limited (further “Peanut.Trade” or “the Company”) as an information technology strategic advisor and liquidity provider in relation to the digital asset of Aurora DAO (further “AURORA token” or “token”). The Company specializes in MEV and algorithmic trading and is one of top arbitrageurs across CEFI and DEFI markets as well as technology provider to other market makers in the digital assets space. The Company started active discussion with Aurora Foundation in November 2023.
The following proposal introduces Peanut.Trade, presents terms for a liquidity provision agreement for the AURORA token, and seeks the Aurora DAO community’s approval to allow the Company:
- to provide liquidity to AURORA token on the agreed centralized and decentralized exchanges;
- to serve as a consultant on liquidity provision improvements;
- to provide a 36-month loan of up to 10m (ten million) AURORA tokens from the Aurora DAO treasury, which could be used by the Company to improve liquidity and make markets in token on supported exchanges. To best support liquidity, an agreed amount of the token loan will be due prior to the start of liquidity provision service. Following the loan period, the Company will return the token loan amount due to the DAO’s treasury.
Value added and problems to be solved
- Friction in Price Discovery: as a liquidity provider, the Company will provide continuous liquidity and reduce the bid-ask spread, enabling transactions at a better price.
- High Transaction Costs: through competitive bid and ask prices, the Company will ensure that the market participants can buy or sell the token without incurring significant slippage or spread-related expenses.
- Volatility Management: by providing liquidity and acting as a stabilizing force, the Company will enable smooth price discovery for the token.
- Ecosystem Synergies: the Company aims to establish a mutually beneficial relationship with Aurora and the Aurora DAO. In addition to market-making services, the Company is able to facilitate introductions to other ecosystem partners and strategic initiatives to drive the growth and adoption of the token.
- Develop a long-run strategy for the Aurora DAO in respect of Aurora token liquidity provision, including expansion into new centralized and decentralized exchanges. Potential further listings on popular centralized exchanges should result in higher volumes that is an important factor in furthering retail adoption.
- The Company will also offer valuable insights into market trends and narratives, advice on the token microstructure, managing financial risks, including hedging strategies to protect against market volatility.
- Increased competition across multiple liquidity providers should arguably improve the benefits even further, creating a more reliable trading environment.
Specified targets and performance remuneration of 36-month engagement
Should the price of the token grow at least 350% (and stay above for certain period of time) during 36-months from the commencement date the Company gains a right to buy 1,000,000 tokens from Aurora DAO using token/USDT rate of 0.01. Should the price of the token grow at least 700% (and stay above for certain period of time) during 36-months from the commencement date the Company gains a right to buy 600,000 tokens from Aurora DAO using token/USDT rate of 0.01.
Subject to final agreement, the Company commits to:
- Use commercially reasonable efforts to provide liquidity for token listings on centralized and decentralized exchange venues.
- The Company will use the loan to provide liquidity for token, and will not use the loan for lending, staking, or governance.
- The Company commits to paying back at least 50% of realized arbitrage profits, if any appear as a result of aforementioned activity.
Liquidity Provision Proposal
The proposal will require:
- Approval to enter into an agreement for liquidity provision (“Agreement”) between the Company and Aurora DAO (BVI).
- Authorization from the Aurora DAO to lend up to 10m AURORA tokens from the community treasury to the Company, in order to provide liquidity across centralized and decentralized exchanges.
- Transfer 25m AURORA tokens to aurora-dao-bvi.sputnik-dao.near for the purpose of entering into the agreement with Peanut.Trade Limited on terms described above.
- The above decision should consider that KYC/AML checks in respect of Peanut.Trade Limited have been completed successfully by Aurora Foundation (Cayman Islands).
- Aurora DAO (BVI) shall enter into the respective service agreement with Peanut.Trade Limited and transfer 10m tokens for liquidity provision part as a Loan to Peanut.Trade Limited.
- Aurora DAO (BVI) shall hold 10m tokens and use it as reward according to the proposal described above.
- Aurora DAO (BVI) will hold an additional 5m AURORA and utilize it for any relevant activities with Peanut.Trade Limited, provided that it yields positive outcomes for the ecosystem.