1. Summary
The following proposal introduces AlphaLab Capital (ALC), presents terms for a market-making agreement for the API3 token, and seeks the API3 DAO community’s approval to:
- Allow ALC to serve as a market-maker for the API3 token
- Provide a loan of 500,000 API3 tokens from the API3 DAO’s primary treasury address (Ethereum mainnet contract address 0xD9F80Bdb37E6Bad114D747E60cE6d2aaF26704Ae, the “Primary Treasury”) to AlphaLab Capital, which will be used by AlphaLab Capital to make markets in API3 on supported exchanges
This proposal is being submitted via the primary agent submission method. This proposal’s successful passage and execution will be deemed acceptance of its offer terms.
2. Abstract
AlphaLab Capital Group is a technology-driven trading firm that transacts over $2B a day in crypto assets across 60+ exchanges, both centralized and decentralized. Since 2017, we have provided market liquidity and efficient price discovery. Our team of 70+ engineers have previous experience building technology and trading algorithms at companies like Citadel, Tower Research Capital, Goldman Sachs, and Stripe. We operate thousands of trading algorithms 24/7 on a globally distributed network of 500+ trading servers.
To best support liquidity, the token loan will be due in full prior to the start of market-making.
Following the loan period, ALC at its option will either return the full API3 token loan amount to the Primary Treasury, or 1,750,000 USDC tokens (Ethereum mainnet contract address 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48, “USDC Tokens”) to the DAO’s secondary treasury address (Ethereum mainnet contract address 0x556ECbb0311D350491Ba0EC7E019c354D7723CE0, the “Secondary Treasury”).
Should the proposal be implemented, ALC would begin market making as early as July 31 or within 5 working days after receiving the tokens.
3. Motivation
The motivation behind this proposal is to leverage the expertise and experience of ALC, a leading technology-driven trading firm, to provide market-making services for the API3 token. By offering our market-making services to API3, we aim to address existing challenges and unlock new opportunities for the project.
Problems it solves:
- Friction in Price Discovery: As a market maker, AlphaLab Capital will provide continuous liquidity and reduce the bid-ask spread, enabling transaction at fair prices.
- High Transaction Costs: Through competitive bid and ask prices, ALC will ensure that 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, ALC will enable smooth price discovery for the API3 token.
- Ecosystem Synergies: ALC aims to establish a mutually beneficial relationship with API3 and the API3 DAO. In addition to market-making services, AlphaLab Capital is able to facilitate introductions to other ecosystem partners. This includes offering OTC services and collaborating on strategic initiatives to drive the growth and adoption of the API3 token.
This will create a more reliable trading environment, attracting new DAO participants and contributors with minimal slippage and contributing to the project’s success.
By engaging AlphaLab Capital as the market-maker for the API3 token, the project will benefit from reduced transaction costs, volatility management, improved liquidity, professional expertise, and potential ecosystem synergies. AlphaLab Capital’s track record, technological prowess, and commitment to excellence make us an ideal partner for API3. We are excited to contribute to the success of the project and collaborate with the DAO to unlock the full potential of the API3 token within the crypto market.
4. Specifications
Loan Amount: 500,000 API3 Tokens
Loan Start Date: July 31, 2023
Loan Duration: 12 months
Loan Repayment Terms: At the end of the contracted duration, AlphaLab Capital has the option to return either the loaned tokens to the Primary Treasury or USDC Tokens at:
500k tokens * strike price of $3.50, totalling 1.75M USDC Tokens, to the Secondary Treasury.
Termination Terms: At any point during the term of the contract, if API3 Foundation is dissatisfied with AlphaLab Capital’s services, API3 Foundation will have the right to terminate the loan with 30 days’ notice, at which point the loan will be repaid by AlphaLab Capital in line with the above terms.
5. Benefits
If given the opportunity to provide market-making services for API3 token, AlphaLab Capital will endeavor to provide market liquidity in the agreed-upon exchange trading pairs to facilitate smooth and slippage-free transactions when possible. AlphaLab Capital will also help facilitate introductions to other potential partners and work with the DAO to explore other synergies with AlphaLab’s other business verticals, including OTC services.
6. Vote
Voting for this proposal means that you are in favor of AlphaLab Capital providing market-making services for API3 token, under the agreed-upon loan terms, for a period of 12 months.
Voting against this proposal means that you do not wish to have AlphaLab Capital provide market-making services to the API3 token under the current terms.