[SC-1] - Exchange Listing

Governance Meta
1

Idea

Initiate discussions around token listing in Tier-1 exchanges.

Motivation

While the topic of exchange listing has been heavily asked (or/and wanted to be discussed), this has been shun until the launch of authoritative DAO for legitimate reasons. As such, now is the good time to initiate this discussion.

There are obvious pros and cons of getting listed in Tier 1 exchanges, as applicable for many other projects. To save time and space, I will highlight the two most critical issues faced by and relevant to API3 token: it’s accessibility and a lack of liquidity issues.

  • Accessibility: API3 is currently listed in Okex, Huobi, Kucoin, and a few DEXs (Decentralised Exchanges). It is fair to say that the go-to exchange for a majority of users is Binance, Coinbase, (FTX, Kraken, Bitstamp, etc), and I’ve rarely come across average users holding KYCed accounts in the above Chinese exchanges nor favor DEXs (Decentralised Exchanges) due to their costs/complexities. Having to sign-up additional accounts (KYC, sending funds, writing private codes, etc, waiting for account approval, etc) create a big barriers of entry and friction for average users, which represent a large user base in the space.

In normal start-ups, it’s similar to having a high drop-out rates in the sign-up phase of a product due to complexities (interested users in API3 become discouraged in sign-up phase due to many unnecessary frictions) or similar to us not being listed in iOS Appstore and Google Store.

  • A lack of liquidity: From here (API3 price, chart, market cap and info | CoinGecko), we can see that API3 has a poor liquidity. $20,000 purchase from an exchange will move the market by 2% and if we look at the likes of Band and Link, it has a 6 and 7 figure liquidity. Having a weak liquidity could result in a few large sellers (or buyers) to drastically move the pricing, making it difficult for sophisticated investors to deploy capital into API3 token (both entry/exit risk). Having more exchanges and diversified liquidity resolves this issue and presumably, Tier 1 exchanges require higher liquidity and orderbook depth, so combined with the accessibility issue, I consider exploring Tier-1 exchanges to be adequate (rather than increasing market maker liquidity in Okex/Huobi).

The current bear market timing is also great for us to negotiate on the fees associated with an exchange listing. Despite Coinbase being the most favored exchange, they have higher requirements which API3 does not seem to meet at this stage so i suggest we target for Binance listing by Q4/21 with the leg work being started in Q3/21. (These dates are just example timelines from me to brainstorm which is likely to be different in reality).

Comment and share your thoughts so we can proceed to an official proposal in the near future.

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Hey congrats on being the first to post on our forum! (beside me)
I had a feeling that one of the first posts is actually going to be about a potential listing.
I’m not going to give my opinion on this, however i want to highlight one particular part that you mentioned:

nor favor DEXs (Decentralised Exchanges) due to their costs/complexities.

Making the token available to more users should be done with the intention of bringing more people into the DAO and cultivating it with more ideas.
Claiming that the use of decentralized exchanges, which require the basic handling of a web3 wallet, is too complex when at its core it is similar to actually making use of the API3 token, might come off as odd.
Following your argumentation, one might assume staking your API3 tokens and taking part in governance is also too complex for the average user.
So how does the DAO benefit from making the token available to more people that (following your argumentation) are not as likely to stake (with the exception of the potential monetary incentives)?

Cheers,
Ugur
:api3:

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Hey Ugur,

Thanks for doing amazing work. Yes, this was certainly going to be a topic that would’ve come up from someone else eventually. Hope my points were a bit more measured than ‘wen listing’ posts.

To your point, the realistic behavior we should expect from a non-sophisticated user is incremental learning, just like how most of us have grown into the space. Users are first likely to buy tokens based on the projects merits discussed elsewhere, likely from social media posts or someone they deem to have expertise on the field, given that many won’t understand the API3 Whitepaper fully from the outset (nor other projects whitepapers). Once they have some tokens, they are now more interested and vested to find out about it and how to utilise their tokens further to generate additional returns. I would like to think many of us (non-technicals) have gone down this incremental learning route to learn more about the space. From using a centralised exchanges to DEX to staking to degen defi stuff. Sure, there will be those who will go through all the videos and resources from the outset and try to become proficient but what we can’t do is prevent ourselves from creating a path of least resistance and hinder the onboarding process. My personal opinion is that we should open up both routes (all for cultivating use of DEX and funnelling more liquidity there too) but i do genuinely believe this route ends creating a more positive and effective result for DAO/web3 adoption than expecting them to learn all from the outset.

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All for it for the suggestion. We need to work with both approaches and being listed in larger platforms will bring in more net benefits than downsides.

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I agree with OP 100%. Without bigger exchange listings the exposure is going to be limited and not only that the token is not going to be liquid. If the team is trying not to do that because of legal/ regulatory reasons then the bare minimum that needs to be done is boost the liquidity on dex’s to a much much higher point. As OP stated, the +/- 2% on the dex’s is at pitiful levels. Perhaps some kind of DAO sponsored liquidity mining program or incentives for people to provide meaningful liquidity on dexs

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Actually I quite like the idea of increasing liquidity on DEXes, though i wouldn’t personally do it through some type of liquiditiy mining program.
That will just lead to the fact that there is going to be direct competition between API3 that is being used for governance and API3 that is being used in the liquidity mining program.
People would probably shift between chasing the one with ‘more APY’, hurting governance and participation in the DAO in the long run.

My take on increasing liquidity would be something along the lines of what Lido did. The DAO is in possession of about 25M~ API3. A portion of these funds could potentially be used for another investment round (as a treasury diversification round). The following proceeds in ETH could be used by the DAO to pool API3/ETH on DEXes like Sushiswap.

This would:
a) Diversify the treasury into assets like e.g. ETH
b) generate income for the DAO in terms of fees earned on Sushiswap
c) additionally create $SUSHI rewards (about 100 SUSHI/day currently on the Pool) which would form another type of treasury diversification.
d) Not create a competition between staking for governance and providing liquidity through e.g. a liquiditiy mining program

Cheers.

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Agree with the OP, this is not just about the liquidity issue. We can’t be too exclusive and take the purist approach. We need to be pragmatic and work on low hanging fruits whilst working on bigger ideas. Yin and Yang.

As long as there are no regulatory concerns, there is more pros than cons.

Separately, I would also back the treasury diversification round in a different proposal. Really good point @UgurMersin.

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I would back the treasury diversification round but think that adding liquidity there is a bare minimum step. Definitely some exchange listings would boost the profile of the project imo

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There needs to be a good balance between ideal and pragmatic reality. The OP’s example on ‘equivalent to not being listed to iOS Appstore and Google Playstore’ is spot on!

I’m starting to wonder whether there is a strong group think phenomenon within the inner circle and virtue signaling going on about the DAO vs anything centralized is bad. Very black and white. The reality is most of the general public use Binance.

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While i appreciate all of the feedback i want to clarify some things here:

I’m starting to wonder whether there is a strong group think phenomenon within the inner circle and virtue signaling going on about the DAO vs anything centralized is bad.

Statements like these only have negative effects. This is nothing more than an assumption in an attempt to spike up some type of ‘Team vs Community’ narrative. In reality we’re all on the same team. Let’s always work together in a positive way.

The reality is most of the general public use Binance.

As with everything around the DAO the solution to this is quite simple. Gauge public sentiment, create a vote and let the DAO members decide. If you win the vote, you can initate talks with Binance, deal with the legal requirements and facilitate everything. It is fully in your power to start this movement if you’re of the opinion that it is either not happening or not happening fast enough.

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Upvote! Ridiculous to see price change of 20-30% a day. How do we vote? and why there is no posts from the core team? how much will it cost? and any legal issues?

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I’m going to repeat what I already posted in the price chats a couple of days ago. It is sad that the first post in this forum is about an exchange listing and reflects bad on the community.

We could be discussing marketing efforts or business development efforts. How do we gather more data providers as Chainlinks number keeps increasing and now that BAND officially joined the race? How do we gather more dApps that want to partner with us when our feeds become available? How can we, as the community, help with marketing efforts.

But no, the first post had to be a poorly concealed way of asking for when Binance.

-and why there is no posts from the core team? @creed

I’m not sure how long you have been part of this but team members (especially legal and marketing) made multiple appearances and explained why it is unnecessarily legally risky if they publicly talked about exchanges in any capacity. Even one post within this thread of a core team member is actively avoiding this topic. Isn’t this telling you all that you need to know?

-I’m not going to give my opinion on this

Where does that leave you as somebody that wants this token listed on Binance.

1.Trust that the team is working on it in some type of capacity even though they are not actively talking about it

2.Create a proposal where you state how much money you need to make the listing happen.

The Binance requirements for listing are pretty easily researchable here.

-how much will it cost? and any legal issues? @creed

Point 11 states that Binance is requiring a legal opinion, so it would be up to the proposal creator to see what the requirements of this are and how much it would cost. Any potential legal issues would be covered with such an opinion I suppose, which is why exchanges request it in the first place.

My opinion on this is simple: This thread proves that we are not going to get an official comment from the team and while I would not mind some tier 1 exchanges I don’t think asking for it over and over again when the other party is avoiding the topic is going to bring us anywhere.

So either wait or create an on-chain proposal.

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Hi Ugur,

just to clarify… so if the DAO pushes through a vote for a Tier 1 listing then volunteers from the DAO would then need to initiate listing talk? Does this mean that the ‘team’ will no longer be actively negotiating listings with CEX’s, or are there multiple avenues to get a listing done?

To me it seems that if it is the case that volunteers from the DAO have to organise the listing, then we will need some tools and framework to smoothly delegate and organise this and for any future DAO related requests.

Do you have any examples how these kinds of issues have been resolved previously in other DAO’s? What would you advise for the DAO to do in terms of administration and delegation of responsibilities?

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My interpretation of what he said is that it won’t change what the core team can talk about publicly on this matter one way or the other. They’ll continue doing what’s best for the project and what’s in our best interest, which is not taking unnecessary risks. It would be naive to assume they don’t want more mainstream exposure.

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As with any DAO Proposal, if funding is needed to accomplish the aims of the Proposal, the amounts requested should be in the proposal with details on how they are to be used, deliverables, etc. For any DAO Proposal, the Proposers (or anyone that would be involved, as outlined in the Proposal) would only be “volunteers” if they choose not to request funds from the DAO treasury, or if they are not requesting personal payment as part of the Proposal. Proposers are not proposing ways to force other people to do things; they’re proposing how they intend to accomplish something (usually with others on board).

The Sentiment-Check section of the forum is to discuss some of these particulars and gauge “sentiment” for some social consensus on whether the vote has a chance of passing.

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I would politely ask you to refrain from such accusations. I’ve dedicated a good portion of my time to thoughtfully lay out valid points, which you may or may not agree. If you have any counter points against the two issues I have raised, please do make a sensible rebuttal. I have no interest on the listing date and also am not trying to make a fast buck from this. My main point here is the ripple effect and the spillover effect as a result of Tier 1 listing. I would appreciate your apology on this tbf.

@Erich - I have similar question as @Headroom. Even if the proposal specifies the budget and people, can non-team members actually get this deal done? I assume the venues will request various documentations and detailed info on the project, are you willing to share these information with the ‘elected’ party should it go through? not sure if the venues will work with volunteers like ourselves? can the proposal designate responsibility to the core-team or its new hires for this purpose?

@Erich - The reason I had posted this was to not only gauge communities thoughts (most of the retail wouldn’t mind this) but also core team’s position. Because until now, we couldn’t really get into any productive discussion on this and Telegram’s automated (Rose) response was saying that the team won’t engage in this “until the launch of authoritative DAO and concluding on the legal opinion”. I would’ve thought this has made a good progress by now and i wanted to know if the core team can’t comment on this for legal reasons? cost rationale? philosophical reasons?

The pros are obvious. The cons I see is; legal, cost, and philosophical, so what exactly is preventing you guys from even engaging in the conversation? This will either come up sooner or later and appears to be the most discussed topic so far.

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Sorry if you felt insulted by this in any way, I most definitely did not intent to hurt your feelings. My issue is that your post did nothing but bring out moonboys. While you started this topic off with good intentions and a reasonable time perspective, it was followed up with accusations and conspiracy theories about the team with no value add at all. My post was mostly directed to these individuals and I do agree that exchanges are a good idea in the long run.

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Thanks @filthycasual. Certainly the moonboys are out and skewing the discussion one sided but thats why I would love to hear from the team, barring there is no legal risks.

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In terms of documentation and detailed info with respect to API3, there are two general categories: that which can be publicly shared (most of which is found on the API3 github, website, and API3 docs), and that which is subject to non-disclosure agreements ("NDA"s, for example, just about everything with API providers at the moment, legal opinions (which will necessarily remain non-public)) or confidentiality terms in legal agreements. Should a DAO Proposal be passed that requires access to NDA-relevant, confidential or privileged documentation (with the API3 Foundation as a party), the actors in that proposal will need to similarly accede to an agreement with the API3 Foundation as the DAO’s legal wrapper, which promises to maintain the confidentiality. I will indeed work with such people/entities that enter into agreements with the Foundation to preserve confidentiality, as that’s part of my job as a counsel to the Foundation!

Philosophically, I think very few have any issue with easier access to API3 governance. Of course, participants should be familiar enough with web3 to be able to actually stake, vote and participate, and understand the mission of API-web3 connectivity, but the reasons for not discussing exchanges whether or not pending are primarily legal and regulatory: nothing good comes out of communications which are speculative in nature in a view towards token price, and at the end of the day, because centralized exchanges are… centralized… they make their own decisions as to listings despite the level of education, expenditure, cooperation, etc. involved externally. Part of being a compliance-focused project and protocol is exercising extreme caution where unknowns are present and speculation could arise which could damage a new/young DAO, as tempting as it may be to respond favorably to every community question.

To be clear, these are completely valid questions, which I was going to address on the next community call as important reasons for the legal wrapper: my job is to act in the interest of the DAO/Foundation – where confidentiality is required I preserve it, and I (and those others subject to confidentiality agreements) otherwise seek to open-source as much as possible to educate the stakers and wider community and build the ecosystem.

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Hope @Erich covered everything with his post. Don’t have anything more to add here.

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