1. Overview:
This proposal authorizes the deployment of protocol-owned liquidity (PoL) into a DAO-controlled Arcadia Pro Account on Base, funded with USDC and SUMR, to support SUMR liquidity following token transferability.
This SIP includes:
- Onchain execution on Base
- Explicit execution instructions to the Lazy Summer Foundation for Ethereum mainnet transfers
- A mandate to a multisig signers to execute swaps, bridging, and Arcadia funding
2. Motivation:
This SIP follows from the RFC discussions and Community Call #7.
This SIP proposes to build a protocol-owned liquidity (PoL) position to support the onchain liquidity of the SUMR token after initial price discovery (via Aerodrome Ignition). Having PoL increases stability of the token (lower volatility, less slippage), and is a strategic asset for the DAO in itself (collecting AERO rewards and/or trading fees).
This SIP proposes to use Arcadia Pro to actively monitor and rebalance the PoL, to guarantee that the position remains in range and to manage inventory risk. Arcadia Pro is a non custodial solution to manage concentrated liquidity within clear bounds (onchain enforced) set by the DAO, who remains the sole owner of PoL.
As Arcadia is non custodial, the DAO can at any time terminate the automations and/or withdraw all assets from their Arcadia Pro account.
This SIP follows the discussions in the referenced RFC and Community Call #7.
3. Specification:
3.1 Amounts
The DAO authorizes the use of treasury assets (0x447BF9d1485ABDc4C1778025DfdfbE8b894C3796) for PoL deployment as follows:
-
Ethereum Mainnet (via Lazy Summer Foundation execution):
- USDC: $85,000
- USDT: $15,000
→ Total: $100,000 USD equivalent
-
Base (onchain via governance execution):
- SUMR: 600,000 SUMR tokens
The targeted PoL composition is approximately:
- $100,000 USD (stablecoins)
- ~$100,000 USD worth of SUMR at deployment
The exact amount of SUMR ultimately deployed will be determined based on the spot price after initial price discovery. Any unused or surplus funds (stablecoins or SUMR) must be returned to the DAO treasury.
3.2 Execution & Authority
This SIP intentionally separates authorization (governance) from execution (Lazy Summer Foundation and multisig), due to the DAO operating across multiple chains.
3.2.1 Onchain Governance Execution (Base)
Upon passage, this proposal will execute onchain to:
- Transfer 600,000 SUMR tokens on Base from the DAO treasury
0x447BF9d1485ABDc4C1778025DfdfbE8b894C3796to the multisig:
Safe (Base):0x89b39e0007577e5aE3d9f87CAaeaC4d2A3db5B34
This onchain vote serves as the binding authorization for all subsequent actions described below.
3.2.2 Lazy Summer Foundation Instruction (Ethereum Mainnet)
Because the Lazy Summer Foundation retains the Governor role over the Ethereum mainnet treasury, this proposal explicitly instructs and mandates the Foundation, upon passage of this SIP, to execute the following transactions on Ethereum mainnet:
- Transfer 85,000 USDC
- Transfer 15,000 USDT
From the Ethereum treasury to the multisig: 0x89b39e0007577e5aE3d9f87CAaeaC4d2A3db5B34
3.2.3 Multisig Mandate (Post-Transfer)
Upon receipt of funds, the multisig is mandated by governance to:
- Swap assets as required
- Bridge stablecoins to Base
- Fund the Arcadia Pro Account with:
- $100,000 USD
- ~$100,000 USD worth of SUMR
- Deploy PoL via Arcadia Pro in accordance with this proposal
The multisig operates strictly as an execution agent of DAO governance.
3.3 Multisig Configuration
An intermediate multisig will be used to execute swaps, bridging, and Arcadia setup:
Safe (2-of-3):
Signers:
- @jensei:
0x746bb7beFD31D9052BB8EbA7D5dD74C9aCf54C6d - @halaprix:
0x4Eb7F19D6eFcACE59EaED70220da5002709f9B71 - Arcadia signer:
0xF523EEc9E35a697E5bc3e3534167BE9bAdB68e2D
Ownership of the Arcadia Pro Account will be transferred back to the DAO once PoL deployment is complete.
3.4 Deployment Strategy
- Liquidity will be deployed in the same Aerodrome Concentrated Liquidity Pool used by Aerodrome Ignition
- Initial PoL position minted 24 hours after transferability
- Initial range: very broad (~200,000 ticks)
- Range narrowed progressively as price stabilizes
- After two epochs (~2 weeks), migrate to standard Arcadia PoL strategy
The PoL will be deployed in the same Concentrated Liquidity Pool as utilized by Aerodrome Ignition to maximize the synergy between Aerodrome Ignition, the DAO owned veAERO position (if acquired according to @MasterMojo RFC) and the PoL.
The first PoL position will be minted 24 hour after the the transferability event to allow organic price discovery via Aerodrome Ignition. A very broad initial position will be minted (roughly 200 000 ticks) which will be gradually decreased over time as price stabilizes.
3.5 Timeline
Setting up the Arcadia Pro Account and Rebalance strategy to manage the PoL has to be well prepared and executed together with the SUMR transferability event and the launch via Aerodrome Ignition.
-
Before transferability:
- Set up Arcadia account and automation (T - 1 day)
- The Aerodrome Ignition incentives kick in, as organized through [SIP5.16] Enable transferability of the SUMR Token (T - 2 min)
-
Transferability event:
- SUMR transferability enabled (T - 0)
-
After Transferability event:
- Fund Arcadia Account (T + 1 hour)
- After price is settled, the first PoL position is minted with a very broad range to continue price discovery with deeper liquidity (T + 24 h)
- Gradually decrease the liquidity range over next two epochs (two weeks)
- After evaluation of the first two epochs, move to the Standard Arcadia PoL liquidity strategy (T + 2 weeks)
3.6 Costs
- Arcadia Pro does not charge fixed management fees on TVL.
- A 10% fee is applied only to realized yield.
3.7 Communication and support
Arcadia strongly recommends to set up a direct communication channel between Arcadia and SUMR representatives and stakeholders for support, walkthroughs and advice during and after the setup.
4. Risk Assessment:
As there will be no PoL during the first 24 hours, only liquidity bootstrapped via Aerodrome Ignition, traders of the first minutes must be aware that certain buy/sell amounts will incur very high slippage or even be impossible. Not a guarantee, but expectations must be well managed.
$7.5M SUMR incentives (30 million SUMR) have been provided for Aerodrome Ignition at the current price of the already initialized pool ($250m FDV). Thus, during the first days of SUMR trading, a significant sell pressure might be present, for which a limited amount of USDC liquidity will be its potential counterparty. Depending on how mercenary Aerodrome voters are and how much external liquidity is bootstrapped via the incentives, this could result in a significant decrease in FDV in the first trading days.
5. Voting:
If YES - Approve transfer of 600k SUMR and mandate the Lazy Summer Foundation to transfer 85k USDC and 15k USDT to a specified multisig; to deploy capital into Aerodrome pool via Arcadia Pro.
If NO - Do not transfer funds at this time; continue with further discussion.
Tagging @Recognized_Delegates for review.