<h3 id="quickintro">Quick intro</h3>
11,138,343.343 PINK is owned by Polkadex thanks to the creation and distribution of PINK.
After gathering feedback from <a href="2398">the PINK allocation discussion thread</a> and after discussions between the council and the Polkadex Core Contributors and conversations with the PINK Working Group, Polkadex has finalized its planned allocation for PINK on Polkadex. Context
As the network that is home to Polkadex Orderbook, the order book-based decentralized exchange for Polkadot, Polkadex&rsquo;s value proposition for tokens is clear: provide real-time, non-custodial spot-trading markets for governance-approved token pairs. The PINK/USDT market was approved in March and launched on Polkadex Orderbook soon after.
However, due to a lack of organic liquidity as well as the absence of active market making on the PINK/USDT pair, the spot market has not been able to support the high levels of trading volume it is capable of providing. Due to this, no official announcement of the launch of PINK/USDT has been made to date.
Polkadex received its share of PINK a couple of weeks ago, which means we are now able to allocate PINK as we, as a network, see fit, based on the value we can add to the PINK community and wider Polkadot ecosystem.
A majority of Polkadex Council Members believes the best way for Polkadex to add value for the PINK community and PINK traders is to allocate 100% of PINK towards PINK/USDT liquidity on Polkadex Orderbook, thus providing a liquid, non-custodial, CEX-like spot market for PINK traders.
<h3 id="allocationplan">Allocation Plan</h3>
Summary
100% for liquidity and market making:
<ul>
<li>40% to be deployed for immediate liquidity boost to <a href="https://orderbook.polkadex.trade/trading/PINKUSDT">PINK/USDT on Polkadex Orderbook</a></li>
<li>60% to be reserved for liquidity rebalancing, additional liquidity boosts, and/or market maker fees</li>
</ul>
<a href="https://docs.google.com/spreadsheets/d/1BxDIAuJlSVMojg4JH8XDHeSZRS7mvCV-zltS-32-IDI/edit?usp=sharing">Breakdown of PINK allocation</a>
<img src="https://i.ibb.co/ZKyNWgv/Polkadex-PINK-Allocation-Plan.png" alt="" width="640" height="320" />
<h3 id="details">Details</h3>
Liquidity boost
The current plan is to deploy 40% of Polkadex&rsquo;s share as a dual-side liquidity boost for PINK/USDT and integrate a market-making bot to the trading account associated with the multi-sig address listed in the Custody section of this post.
Reserves
60% of the total allocation will be reserved for liquidity rebalancing, additional liquidity boosts, and/or market maker fees as follows:
Rebalancing
<ul>
<li>20% of the total allocation, or a third of the total PINK reserves, will be split between PINK and USDT and will be reserved for any required rebalancing of the initial liquidity.</li>
</ul>
Dedicated Market Maker
<ul>
<li>If the above market-making bot integration plan proves to be inadequate or inefficient, dedicated market-making services might be required for PINK/USDT. In this case a share of the reserves will be allocated towards the provision and retention of a professional market maker.</li>
<li>An estimated number of months of market-making services based on current PINK prices is provided in <a href="https://docs.google.com/spreadsheets/d/1BxDIAuJlSVMojg4JH8XDHeSZRS7mvCV-zltS-32-IDI/edit?usp=sharing">the allocation spreadsheet.</a></li>
</ul>
Additional Liquidity Boosts
<ul>
<li>If dedicated market maker services for PINK/USDT prove to be unnecessary, the remaining two thirds of PINK reserves (AKA the remaining 40% of Polkadex&rsquo;s total PINK share) will be used for additional liquidity boosts and rebalancing.</li>
</ul>
Liquidation of PINK
The allocation plan resulted in a total liquidation of 3,341,502.90 PINK into USDT for USDT-side liquidity on PINK/USDT (2,227,668.60 PINK) as well as USDT reserves for liquidity rebalancing (1,113,834.30 PINK). Liquidation took place on the best-priced markets available and in swap tranches to minimize price impact and maximize the amount of USDT extracted for liquidity.
<h3 id="custody">Custody</h3>
The PINK (and the USDT) allocated towards the PINK/USDT Liquidity Boost (40%) and the liquidity rebalancing reserves (20%) has been sent to a multi-sig wallet controlled by the PDEX holder-elected Polkadex Council Members: esqBxvoNGrZtYPaLMYCFNHLvxy6ekhD14kiVt2EcXp48g29gh
The remaining 40% of reserves is currently held by a Polkadex Core Contributors wallet on AssetHub (13HD1ktcqwaRQ3vsihhqh2R2qB4kS8mca4gXhJ6T8recrdMv) and will also be transferred to the Polkadex Council Members' custody either on AssetHub or on Polkadex.
<h3 id="reporting">Reporting</h3>
Previous transfers and liquidations may be tracked on <a href="https://docs.google.com/spreadsheets/d/1BxDIAuJlSVMojg4JH8XDHeSZRS7mvCV-zltS-32-IDI/edit?usp=sharing">the allocation spreadsheet</a> and via on-chain explorers. PINK (and USDT) balance transfers and rebalancing activities will be added to the sheet with links to on-chain transactions for anyone who wishes to track Polkadex&rsquo;s PINK holdings. This report will also contain any relevant details on the use of the reserves allocation.

<h3 id="quickintro">Quick intro</h3>
11,138,343.343 PINK is owned by Polkadex thanks to the creation and distribution of PINK.
After gathering feedback from <a href="2398">the PINK allocation discussion thread</a> and after discussions between the council and the Polkadex Core Contributors and conversations with the PINK Working Group, Polkadex has finalized its planned allocation for PINK on Polkadex. Context
As the network that is home to Polkadex Orderbook, the order book-based decentralized exchange for Polkadot, Polkadex&rsquo;s value proposition for tokens is clear: provide real-time, non-custodial spot-trading markets for governance-approved token pairs. The PINK/USDT market was approved in March and launched on Polkadex Orderbook soon after.
However, due to a lack of organic liquidity as well as the absence of active market making on the PINK/USDT pair, the spot market has not been able to support the high levels of trading volume it is capable of providing. Due to this, no official announcement of the launch of PINK/USDT has been made to date.
Polkadex received its share of PINK a couple of weeks ago, which means we are now able to allocate PINK as we, as a network, see fit, based on the value we can add to the PINK community and wider Polkadot ecosystem.
A majority of Polkadex Council Members believes the best way for Polkadex to add value for the PINK community and PINK traders is to allocate 100% of PINK towards PINK/USDT liquidity on Polkadex Orderbook, thus providing a liquid, non-custodial, CEX-like spot market for PINK traders.
<h3 id="allocationplan">Allocation Plan</h3>
Summary
100% for liquidity and market making:
<ul>
<li>40% to be deployed for immediate liquidity boost to <a href="https://orderbook.polkadex.trade/trading/PINKUSDT">PINK/USDT on Polkadex Orderbook</a></li>
<li>60% to be reserved for liquidity rebalancing, additional liquidity boosts, and/or market maker fees</li>
</ul>
<a href="https://docs.google.com/spreadsheets/d/1BxDIAuJlSVMojg4JH8XDHeSZRS7mvCV-zltS-32-IDI/edit?usp=sharing">Breakdown of PINK allocation</a>
&nbsp;
<img src="https://i.ibb.co/ZKyNWgv/Polkadex-PINK-Allocation-Plan.png" alt="" width="640" height="320" />
<img src="https://imgur.com/a/pink-on-polkadex-final-allocation-plan-8nX5BFv" alt="" />
<h3 id="details">Details</h3>
Liquidity boost
The current plan is to deploy 40% of Polkadex&rsquo;s share as a dual-side liquidity boost for PINK/USDT and integrate a market-making bot to the trading account associated with the multi-sig address listed in the Custody section of this post.
Reserves
60% of the total allocation will be reserved for liquidity rebalancing, additional liquidity boosts, and/or market maker fees as follows:
Rebalancing
<ul>
<li>20% of the total allocation, or a third of the total PINK reserves, will be split between PINK and USDT and will be reserved for any required rebalancing of the initial liquidity.</li>
</ul>
Dedicated Market Maker
<ul>
<li>If the above market-making bot integration plan proves to be inadequate or inefficient, dedicated market-making services might be required for PINK/USDT. In this case a share of the reserves will be allocated towards the provision and retention of a professional market maker.</li>
<li>An estimated number of months of market-making services based on current PINK prices is provided in <a href="https://docs.google.com/spreadsheets/d/1BxDIAuJlSVMojg4JH8XDHeSZRS7mvCV-zltS-32-IDI/edit?usp=sharing">the allocation spreadsheet.</a></li>
</ul>
Additional Liquidity Boosts
<ul>
<li>If dedicated market maker services for PINK/USDT prove to be unnecessary, the remaining two thirds of PINK reserves (AKA the remaining 40% of Polkadex&rsquo;s total PINK share) will be used for additional liquidity boosts and rebalancing.</li>
</ul>
Liquidation of PINK
The allocation plan resulted in a total liquidation of 3,341,502.90 PINK into USDT for USDT-side liquidity on PINK/USDT (2,227,668.60 PINK) as well as USDT reserves for liquidity rebalancing (1,113,834.30 PINK). Liquidation took place on the best-priced markets available and in swap tranches to minimize price impact and maximize the amount of USDT extracted for liquidity.
<h3 id="custody">Custody</h3>
The PINK (and the USDT) allocated towards the PINK/USDT Liquidity Boost (40%) and the liquidity rebalancing reserves (20%) has been sent to a multi-sig wallet controlled by the PDEX holder-elected Polkadex Council Members: esqBxvoNGrZtYPaLMYCFNHLvxy6ekhD14kiVt2EcXp48g29gh
The remaining 40% of reserves is currently held by a Polkadex Core Contributors wallet on AssetHub (13HD1ktcqwaRQ3vsihhqh2R2qB4kS8mca4gXhJ6T8recrdMv) and will also be transferred to the Polkadex Council Members' custody either on AssetHub or on Polkadex.
<h3 id="reporting">Reporting</h3>
Previous transfers and liquidations may be tracked on <a href="https://docs.google.com/spreadsheets/d/1BxDIAuJlSVMojg4JH8XDHeSZRS7mvCV-zltS-32-IDI/edit?usp=sharing">the allocation spreadsheet</a> and via on-chain explorers. PINK (and USDT) balance transfers and rebalancing activities will be added to the sheet with links to on-chain transactions for anyone who wishes to track Polkadex&rsquo;s PINK holdings. This report will also contain any relevant details on the use of the reserves allocation.

Final PINK Allocation and Liquidity Boost Plan

- **Problem Statement & Audience:** Polkadex aims to enhance liquidity for the PINK/USDT pair on Polkadex Orderbook due to low trading volume, targeting PINK traders and the wider Polkadot ecosystem.
- **Significance:** Lack of organic liquidity and market making on the PINK/USDT pair hinders the spot market's ability to support high trading volumes, necessitating a strategic allocation plan.
- **Proposed Solution:** Allocate 100% of PINK towards PINK/USDT liquidity on Polkadex Orderbook, with 40% for immediate liquidity boost and 60% for reserves for rebalancing, additional boosts, or market maker fees.
- **Expected Outcomes:** Enhanced liquidity, improved trading experience, and increased trading volumes on Polkadex Orderbook for PINK/USDT pair.

#2415 Final PINK Allocation and Liquidity Boost Plan

No Active Proposals