Sentence Summary
Aurora DAO is proposing to engage GSR as a market-maker to provide liquidity for the AURORA token.
GSR’s Market-Making Proposal: Summary
The following proposal introduces GSR, presents terms for a market-making agreement for the AURORA token, and seeks the Aurora DAO community’s approval to:
- Allow GSR to serve as a market-maker for the AURORA token.
- Provide a 24 month loan of 4,000,000 (four million) AURORA tokens from the Aurora DAO treasury to GSR, which will be used by GSR to make markets in AURORA on GSR supported exchanges. To best support liquidity, the token loan will be due in full prior to the start of market-making. Following the loan period, GSR will either return the full token loan amount to the DAO’s treasury, or the USDT equivalent of the tokens at a mutually agreed purchase price, as laid out below.
Targets
(Please note that these are targeted parameters and are not contractually binding. GSR does not guarantee the achievement of these targets.):
- Size and depths: $25-50k within 1% of mid-price & $100k within 3% of mid-price.
- Spreads: Max spread not greater than 50 basis points across most important exchanges and liquid crosses
- Presence: GSR will endeavor to provide an uptime in excess of 98% across supported order books.
Motivation
About GSR
GSR is a leading market maker, ecosystem partner, asset manager, and active, multi-stage investor. In addition to the veteran traditional finance and derivatives background of its founders, GSR maintains an ethos of client service that is at the center of its offerings.
With 300 employees around the globe and a core engineering and trading focus, GSR uses nearly a decade of market data and crypto expertise to continuously refine and expand its trading engines and programmatic execution capabilities, with a focus on providing best-in-class service to projects across different stages of their development. Its trading technology is connected to a plethora of exchanges, including major decentralized exchanges (DEX’s) and lending protocols.
GSR works with projects across the entire crypto ecosystem, and has considerable expertise across the decentralized finance (DeFi) space - with a particular focus on core infrastructure, security, and protocol levels. It has provided, at times, over US$1bn of liquidity a day to DeFi markets, while investing heavily in DeFi protocols across the Web3 ecosystem. Going beyond the breadth of its investments, integrations, and infrastructure, GSR is committed to being an active and reputable collaborator in the space, highlighted, in part, by the launch of GSRBlue: its marquee long-term NFT portfolio of well-known creators and projects.
GSR and Aurora
As a market-maker on centralized exchanges (CEX’s), GSR aims to facilitate frictionless price discovery of the AURORA token, and in doing so, can serve as a buyer and seller of last-resort, helping to reduce transaction costs, and provide meaningful liquidity in periods of heightened market volatility.
If given the opportunity to provide market-making services for the AURORA token, GSR would also like to help facilitate introductions to other ecosystem partners, and work with the DAO to explore how to leverage potential synergies with other parts of GSR’s business. Among the ways GSR can further support AURORA are via OTC services and providing support for exchange listings globally, although these are not part of the market-making arrangement.
Specification
Subject to final agreement, GSR commits to:
- Use commercially reasonable efforts to provide liquidity for AURORA token listings on supported centralized exchange venues.
- This includes, but is not limited to, funding the other side of each listed cross with GSR’s own capital. E.g. if an exchange requires BTC, ETH, USDC, USDT, GBP, EUR, or other quote pairs – GSR will support it.
- GSR will use the loan to provide liquidity for AURORA tokens, and will not use the loan for lending, staking, or governance.
Market-Making Proposal
The market-making proposal will require:
- Approval to enter into an agreement for market-making (“Agreement”) between GSR and Aurora DAO (BVI).
- Authorization from the Aurora DAO to lend 4,000,000 AURORA tokens from the community treasury to GSR, in order to provide liquidity across centralized exchanges.
At the completion of the 24 months, the Agreement would allow GSR to:
(i) Return 4,000,000 AURORA tokens to the Aurora DAO treasury, or
(ii) Deliver to the Aurora DAO treasury the USDT amount equivalent of the 4,000,000 AURORA tokens at the following prices per 1,000,000 AURORA tokens:
- The average price of the AURORA token at the agreed fixing time on each of the three trading days following the market-making commencement date, plus a premium of 20%.
- The average price of the AURORA token at the agreed fixing time on each of the three trading days 6 months after the market-making commencement date, plus a premium of 20%.
- The average price of the AURORA token at the agreed fixing time on each of the three trading days 12 months after the market-making commencement date, plus a premium of 20%.
- The average price of the AURORA token at the agreed fixing time on each of the three trading days 18 months after the market-making commencement date, plus a premium of 20%.
Proposal:
- Transfer 4,000,000 (four million) AURORA to aurora-dao-bvi.sputnik-dao.near for the purpose of entering into the agreement with GSR on terms described above.
- The above decision should consider that KYC/AML checks in respect of GSR have been completed successfully by Aurora Foundation (Cayman Islands).
- Aurora DAO (BVI) shall enter into the respective service agreement with GSR and transfer the relevant funds to GSR.
