Telos Boost dApp Liquidity Program

At Telos, the future of Web3 has never looked more promising, which is why the network is taking bold steps to accelerate the development of dApps and projects built on its platform. Telos recently announced its ground-breaking Fuel Initiative, which aims to increase network composability by welcoming a slew of DeFi protocols and project onboarding.

A key component of this initiative is Telos Boost, a bootstrapping liquidity grant program that received 3.2m TLOS in allocation. The program aims to incentivize developers to create or migrate dApps to the Telos network and provide support for those currently live on Telos.

Developers can use the following link to submit their applications: https://fuel.telos.net/

However, we recommend reading through this article to ensure you fully understand the eligibility criteria and applicable terms.

So, what makes a project eligible for the Telos Boost grant? Telos is looking for applications and teams demonstrating a clear vision, firm conviction, adequate traction, and sound tokenomics. Selected applicants will receive up to $100k of liquidity support for their token in TLOS, firsthand introductions to exchanges, investors, and partners, and the full support of the Telos Foundation’s team of Web3 experts.

For a project to be eligible for Telos Boost, it must abide by and agree to the terms and conditions of the mutual agreement. In addition, every project must satisfy the minimal criteria listed below to qualify for the program:

Eligibility Criteria

1. The project should have a working product or a clear roadmap/timeline for its launch.
2. The project should have precise tokenomics, documentation, and well-defined reasoning to explain token allocations.
3. All members of the project team must be doxed — no exceptions.
4. The project has at least 5k or more followers on major social media platforms.
5. The project team must have a clear strategy for listing and utility.
6. The project team agrees to participate and contribute with exchange listing introductions actively.
7. The project team agrees to share quarterly updates.

Projects that meet the above requirements may submit their applications to the Telos Boost team for consideration. By submitting all the necessary information in as much detail as possible, applicants can ensure a speedy review process.

The Power of Liquidity Pools for Nascent Projects

The liquidity pools created from the Telos Boost initiative will enable the first crucial steps for a project’s community to participate in the DeFi composability of its token. The liquidity allows community members to easily trade a project’s token in a decentralized manner. Furthermore, users can also participate in providing liquidity while earning fees and farming incentives. It is also strongly recommended that all users and liquidity providers understand the risks associated with liquidity pools, namely, impermanent loss.

Impermanent loss occurs when a token’s price shift causes your liquidity pool share to be worth less than your initial deposit. It is temporary since the loss can be recovered if the token pair returns to its initial exchange rate.

Here are three ways impermanent loss can occur in liquidity pools:

• If the price of one token dramatically increases,
• If the price of one token in a pair dramatically decreases
• If the price of one token increases while the other token decreases.

The following tool will help you calculate impermanent loss:
https://whiteboardcrypto.com/impermanent-loss-calculator/

If a project is selected, the liquidity deal flow works as below to ensure balanced risk on both sides:

1. The project team agrees that their token price will not decrease by 50% or more within one week of the implementation of the Liquidity Pool (LP). This ensures that the interests of the project team and their respective communities are aligned. It also assures that the project team does not sell their tokens during this period.
2. If the token price declines by 50 percent within the first week, the project team will be promptly notified and required to take swift, appropriate action. For example, suppose it is discovered that the project team engages in poor business practices and needs to respond to repeated requests for information. In that case, the LP pool will be removed immediately, and a public announcement will be made to prevent additional losses.
3. The program will match up to $100k of TLOS liquidity; the final number will be determined and agreed upon with the project team.
4. The liquidity allocated will be locked in the pool for a minimum period of 6 months and a maximum of 12 months. The exact period will be determined and agreed upon with the project team.
5. The project team provides the equivalent amount of their tokens to the program’s liquidity team. For example, if a project receives a $50k liquidity commitment from the program, the project team will provide $50k worth of native tokens to match in the liquidity pool.
6. The Boost Liquidity team will add the equivalent amount in TLOS and create/add it to the liquidity pool (LP) (Ex: TLOS/BANANA).
7. The Boost Liquidity team will hold the LP tokens of the created pool for the agreement period.
8. When the agreed lock-up period ends, either a new agreement will be made, or the LP tokens will be withdrawn from the liquidity pool. The assets received in return will be distributed later by the below scenarios listed in the next section.

EXIT SCENARIOS:

Risk Analysis:

• The project team takes on the impermanent loss risk of their token falling in value.
• The risk is incentivized if the project token outperforms TLOS. Gains are shared equally (50–50 split), and the Liquidity team keeps the same amount of TLOS or TLOS value.
• If the project becomes inactive or the founders are unreachable, there is a risk of the boost of liquidity of losing the TLOS funds.
• To avoid this outcome, a regular sync every three months is recommended. These meetings allow teams to share updates, listing & growth strategy, roadmap etc.
• Projects with tokens that demonstrate an increased risk of impermanent loss will be notified within one week from the quarterly meeting, and the LP will be removed and refunded.

Are you ready to get started and build a more equitable, decentralized, and fairer future for DeFi users? Click the following link to apply for a Telos Boost grant and join us: https://fuel.telos.net/

About Telos

The Telos EVM is the most powerful and scalable Ethereum Smart Contract platform built to power Web 3.0. Telos features a robust, third-generation, ESG-compliant evolutionary blockchain governance system, including smart contracts, advanced voting features, and flexible and user-friendly fee models. In addition, Telos supports the blockchain ecosystem by serving as an incubator and accelerator for decentralized applications through development grants. Build with us.‍

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