Summary
This proposal seeks DAO approval to redeem protocol-owned LP tokens from underutilized DEX pools (Uniswap V2 and PancakeSwap V2) and redirect those assets toward core operational and development needs. Based on liquidity data and volume activity, this move will allow the project to make productive use of otherwise idle capital, fund hiring, expand development, and improve treasury efficiency—without materially impacting trading depth or market function. On the contrary - it is expected that trading volume will increase as arbitrage opportunities will arise between DEXes and CEXes.
WHY?
Our DEX Pools are shallow. Uniswap and PancakeSwap contribute less than 1% of overall trading volume in structured pools, indicating most liquidity is not actively used. Most trading occurs on CEX (f.e., Gate.io handles ~95% of volume, making on-chain pools largely idle).
| $UNO Metric | Insight | Suggested Action within PIP7 |
|---|---|---|
| DEX Liquidity Depth | Extremely low ($500–$1,000) | Withdrawing shallow pools to free up token capital |
| Trading Volume | Low DEX usage, high CEX volume | Minimum impact to LPs |
| Capital Efficiency | Idle capital stagnant | Towards funding operational cost |
| Treasury Ops Resilience | Market visibility low | Use freed tokens to support hires, audits, marketing, dev — similar to Polygon’s asset redeployment regimens. |
These figures indicate that DEX pools are illiquid and underused, failing to meaningfully support price discovery or trade execution. Keeping protocol-owned liquidity in these pools offers minimal return and incurs opportunity cost, particularly when core operations such as development and marketing are constrained.
Idle capital in these pools has negligible impact on price discovery, user activity, or slippage. Unlocking these assets allows the DAO to fund tangible outputs (new hires, product delivery, token utility) that contribute to long-term project sustainability.
The Idle Pools
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We suggest the removal of protocol-owned LP positions from the following pools:
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Uniswap V2: UNO/ETH
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PancakeSwap V2: UNO/BNB
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Summary of Recoverable Assets
As of today, the protocol has the following approximate reserves locked in the two liquidity pools:
- Uniswap (UNO / WETH):
- 8.87 WETH
- 10,639,766.09 UNO
- ≈ $64,315 USD total value (fluctuates with price and pool composition)
- PancakeSwap (UNO / WBNB):
- 30.064 WBNB
- 7,643,472.957 UNO
- ≈ $45,912 USD total value (fluctuates similarly)
Combined current liquidity value: ≈ $110,227 USD.
Planned withdrawal: 75% of each pool’s current liquidity, equivalent to ≈ $82,670 USD in nominal value (subject to slippage and changing prices).
Breakdown of the Withdrawal Plan (two-month cadence)
We will extract 75% of the existing liquidity in a controlled, phased manner to balance runway needs with market impact. The cadence is:
Month 1 – Initial Extraction (50% of current liquidity)
- Uniswap:
- Remove 4.435 WETH
- Remove 5,319,883.045 UNO
- PancakeSwap:
- Remove 15.032 WBNB
- Remove 3,821,736.4785 UNO
Month 2 – Secondary Extraction (50% of the remaining liquidity, i.e., an additional 25% of the original)
- Uniswap:
- Remove 2.2175 WETH
- Remove 2,659,941.5225 UNO
- PancakeSwap:
- Remove 7.516 WBNB
- Remove 1,910,868.23925 UNO
Total (75% of initial)
- Recovered native assets:
- WETH: ~6.6525
- WBNB: ~22.548
- UNO: ~13,712,429.28525
Estimated total recovered value: ~ $82,670 USD (split across ETH/BNB and UNO, subject to price movements).
The recovered ETH and BNB will extend the project’s operational runway without the need to liquidate UNO tokens on the open market. This preserves token scarcity, reduces potential sell pressure, and supports long‑term price stability.
By holding the recovered UNO, we also maintain strategic reserves for future liquidity or ecosystem incentives.
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This Liquidity can then be redirected to Treasury Use for the following:
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Hiring technical contributors
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Smart contract audits
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Core contributor salaries
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Operational runway extension
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Community & marketing activations
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This proposal also looks towards potentially redirecting liquidity into yield-bearing strategy vaults (e.g. Gamma, Arrakis, or lending strategies), pending a DAO follow-up vote in the future.
Proposed Implementation Timeline:
| Date | Milestone |
|---|---|
| Day 0 | DAO Snapshot vote begins |
| Day 3 | Snapshot vote concludes |
| Day 5 | LP tokens withdrawn and reallocated to treasury multisig |
| Month 1–3 | Funds used for hiring, dev, and marketing; quarterly report shared |
In the current phase of the market, capital efficiency is survival. Redirecting non-performing liquidity toward mission-critical functions gives Lunos the best chance of expanding its development roadmap, retaining contributors, and delivering long-term value to holders. In addition to this proposal, we’re also taking additional measures such as leaning out resource costs, and making significant progress towards securing applicable grants (f.e. Eigen Foundation Grants Programme, the BNB grants programme, and more), as well as proposing to the Syscoin Foundation’s DAO a grant for funding technical development.
We urge the DAO to pass this proposal and enable responsible, transparent treasury reallocation.