Polkadot Summit - Liquidity Workshop Notes

Ecosystem
1

The goal of this workshop at the Polkadot Summit was to identify ecosystem champion(s) to define amounts, terms, and uses of treasury funds targeted at eliminating friction for users joining Polkadot.

Three (four) mechanisms were discussed which I’ll attempt to summarize below.

  1. Expanding support for stablecoins on parachains
  • The CEX which support USDT on the Polkadot Asset Hub currently only support withdrawing to Asset Hub accounts.
  • We discussed the desire to increase CEX awareness and adoption of USDT withdrawals to parachains using XCM; @IkerParity provided an overview of the Transfer API (beta) that enables withdrawing assets from custody on system or relay chains to parachains.
  • Using treasury funds on this was met with skepticism; more research is required to understand how funds might be spent and how much it might cost.
  1. Matching grants of parachain assets that seek to establish DOT trading
  • This would seek to ensure that anyone with access to DOT can access any parachain and its native assets.
  • We discussed which trading platforms could be used; some suggested benefits to collecting liquidity in a single place (e.g. the Asset Hub), but general sentiment seemed in favor of allowing parachain teams to dictate where the pair would be created or subsidized.
  • There was interest expressed from teams on assistance from the treasury with price discovery in order to allow teams with illiquid tokens to participate.
  • Clear interest in collaborating, but more research is required to understand how much liquidity is needed and the impact this type of proposal or series of proposals could have on the treasury.
  1. Rewarding parachains for stablecoin adoption
  • This would seek to provide parachains with meaningful USDT adoption with DOT rewards that can be used at the parachain’s discretion.
  • There was insufficient time to discuss this topic beyond introduction; no conclusions or next steps were identified.
  1. Accepting DOT for fees
  • It was suggested that this would better help Polkadot onboarding UX than any funding that the treasury could provider; a separate topic has been created for follow-up discussion on this topic.

Next steps
I am planning the research to address #1 and coordinating with those who raised their hands as interested in collaborating to identify and execute next steps for #2 and #3.

Thank you to those who contributed to the session and to everyone who attended Polkadot Summit and/or Decoded in Copenhagen last month!

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2

I think that #4 removes the need for #2 and is clearly the most appropriate route.

Mostly excited about the Transfer API which would allow withdrawals of USDT directly from e.g. Binance to parachains (removing the awful UX of having to withdraw to the AssetHub first) - would be supportive of treasury funding to push this solution.

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I agree that the UX to go through Asset hub is a pain and en extra useless step so far for users, especially inexperienced users in the ecosystem.

For a user you have to:

  • Be aware of how Asset hub works (ED, sufficient asset…)
  • Teleport DOT to Asset hub (currently the only option i know is to use polkadot.js.org which is NOT a solution for users/newbies)
  • Perform 2 tx instead of 1 which can be stressful for basic users considering all the extra knowledge/steps explained before