Ensuring DFI Market Making Continuity: Funding for Operations on KuCoin

[defichain-lab]

Overview

1. Requester(s): DeFiChain Labs
2. Amount requested in DFI: 3,500,000 DFI
3. Cycles: 1
4. Receiving address: df1qmckarq6l6x00rslmmvj2wjmsdtlyfs6ymynz5g

This proposal seeks approval for 3,500,000 DFI (~$52,000 USD) to sustain market-making activities for DFI on KuCoin, one of DeFiChain’s most significant exchange partners.

Market-making is essential for ensuring liquidity, minimizing price slippage, and maintaining a healthy trading environment for DFI. DeFiChain Labs guarantees the continuation of these activities on KuCoin. For smaller exchanges, the decision to extend market-making contracts will remain at the discretion of the exchanges themselves. If the community wishes to fund market-making on additional exchanges, a separate CFP would need to be filed.

DeFiChain Labs has worked diligently to estimate costs as accurately as possible. While this proposal aims to cover one year of operations, external factors such as exchange rate fluctuations or unexpected increases in operational expenses may require further discussions for additional funding.

Additionally, DeFiChain Labs has secured an in-principle agreement to carry over the current liquidity held on KuCoin as part of the transition.

The Request

Total Request: 3,500,000 DFI (~$52,000 USD)
Timeline: Budget for the full calendar year of 2025
Objective: Ensure the continuity of market-making operations for DFI on KuCoin, maintaining liquidity and trading efficiency.

Why This Proposal Matters

1. Maintaining Market Stability
   Market-making provides liquidity, reduces price volatility, and ensures a smoother trading experience for users. Continuity on KuCoin, the largest exchange for DFI, is crucial to preserve confidence and market integrity.
2. Efficient Use of Community Resources
   Focusing on KuCoin ensures that resources are allocated to where they have the most significant impact. Smaller exchanges are encouraged to extend contracts independently, reducing the burden on community funds.
3. Supporting Decentralized Growth
   A healthy market presence on a major exchange like KuCoin strengthens DeFiChain’s visibility, user acquisition, and ecosystem development.

Cost Breakdown

Market-Making Fees: 3,000,000 DFI for market making
Operational Costs: 500,000 DFI for Miscellaneous costs for managing contracts etc.

Conclusion

By approving this CFP, the community secures the continuity of DFI market-making operations on KuCoin, ensuring a stable and efficient trading environment for one of DeFiChain’s most significant trading pairs. This proposal reinforces the ecosystem’s growth and stability while maintaining responsible and transparent management of community funds.