Author: Mendi Core Team and Yellow Network
Title: Deploy a $MENDI market on Yellow Network
Type: Request for comments
Abstract
Yellow Network solves the problem of genuinely decentralized trading by allowing participants to swap assets across different exchanges without having to rely on block creation. This brings all parties, exchanges, blockchains, and trading firms together, currently creating a network of brokerages and allowing for a more efficient trading infrastructure. In the current status one broker has been onboarded and Yellow will onboard 3-4 additional ones over the next months. In the next months more and more will be added to achieve a network of brokerages.
Yellow Network embodies a decentralized Layer-3 peer-to-peer mesh network allowing brokers to communicate, trade, and aggregate the liquidity of connected nodes.
Mendi Finance has a large amount of unused $MENDI tokens in protocol growth allocation that could be utilized to deepen liquidity behind the token in a new market.
Yellow Network proposed a structure where the USD sides of the trades are covered by Yellow Network and the MENDI side of the trades would be covered by the MENDI DAO to expand MENDI markets to the newly created L3 P2P clearing house built by Yellow.
Proposal Summary
Allocate $50k USD worth of $MENDI tokens as seed liquidity to create a market on Yellow Network’s new Layer-3 P2P which acts as a decentralized clearing house across multiple different markers in web3.
At current price this would be an estimated allocation of 200k $MENDI from Protocol Growth. (5/24/2024)
Motivation
Yellow Network offers a distinctive solution to the $MENDI DAO by allowing it to supply liquidity exclusively in MENDI tokens, while Yellow Network provides the counter side to the trades, thereby building liquidity in the Yellow Market.
Yellow Network has extensive experience within the CeFi and DeFi industry and they are attempting to build a new type of next generation trading that is actually able to serve the demand of current CeFi traders in a decentralized way.
Yellow Network through their wallet would also be running marketing campaigns for further exposure and promotion of $MENDI to the Yellow Community which are also Linea users.
Technical considerations
Mendi Core Team and Yellow Network would hold equal keys to a multisig wallet to be used as the intermediary of the new market before some further developments make it possible to move it through directly to an account abstraction wallet on the Yellow Network. This provides security as no party could withdraw the funds without the other sides signature.
Future opportunities that can be considered here is the potential to set up a lightweight exchange client specifically for the Mendi DAO to be used as the prime broker behind the trading of the $MENDI token on the Yellow Network. This can enable the DAO to generate revenue behind the pairs by acting as its own prime broker. This setup is also enabled through Yellow Network and NeoDAX, through a unique grant program that Mendi can be a part of.
Expected Timeline
- Temperature Check during RFC: May 28, 2024 - May 31, 2024
- Governance Vote: Pending On Results from Temperature Check during RFC
- Deployment Target: Beginning of June if everything passes
Conflict of Interest
No conflict of interest exists between Mendi team and Yellow Network
Next Steps
If RFC + Temperature Check passes the proposal will move to the MIP phase.
References and Links
https://terminal.yellow.com/network