Beamex PERPadot: DOT LP Depth Loan, a significant DOT liquidity depth on Beamex Perpetual Exchange

This post serves for discussion, comments and suggestions from Polkadot OpenGovernance for the upcoming Treasury proposal from Beamswap Team.

Proponent Address: 15zT5nrMkpK4NdQRCHdpMvLCaU4Mt2ekVP9hXkPzcMwPNEw2

Requested Amount: 500,000 $DOT for one year

Short Description: The aim is to create a significant $DOT liquidity depth on Beamex by allocating 500,000 $DOT into Beamex Liquidity Pool (BLP), allowing users to open larger leverage positions natively on Polkadot. Funds would be controlled by Beamswap multisig wallet.

Summary

At Beamswap, we acknowledge many significant steps made across the whole Polkadot ecosystem before the Polkadot 2.0 launch. With new interest and new players coming in and committing to the Polkadot ecosystem, users should also enjoy a well-positioned on-chain option for perpetual $DOT trading. The Beamex PERPadot campaign aims to do just that - to create a seamless native decentralized perpetual trading experience. Beamex is the only and most used platform offering long/short decentralized trading options, limit orders, and swaps without any price impact. This is made possible by price oracles, which draw data from on-chain price feeds and centralized exchanges.

Primary Goal: Creation of significant liquidity depth for leverage trading on Polkadot Project Description: Beamex is the only perpetual exchange on Polkadot, specifically on the Moonbeam Network. As a decentralized spot and perpetual exchange, Beamex delivers advanced crypto trading, both swaps and leverage trades at low fees and zero price impact, via direct wallet connectivity.
Requested DOT Grant Amount: 500,000 $DOT
Use of Grant: 500,000 $DOT would be deposited into Beamex Liquidity Pool (BLP) - a unified LP token that constitutes an index of assets supporting all trades on the platform.
Motivation: Aligned with the vision of becoming a fully user-powered perpetual exchange, the funding of Beamex would significantly contribute to acquiring new users in the Polkadot ecosystem. This would further elevate its standing compared to other networks and projects, such as dYdX on Ethereum, GMX on Arbitrum, and Jupiter on Solana.

If approved, the 500,000 $DOT would be deposited into the Beamex Liquidity Pool (BLP) to create a significant liquidity depth for leverage trading on Polkadot. This request runs in parallel with the liquidity incentives request, which aims to offer 475,000 $DOT as a reward to all liquidity providers on the platform. 500,000 $DOT would not be allocated to farming and would not farm any liquidity incentives.

A secondary goal of the proposal is to create a significant influx of liquidity and leverage traders to Polkadot. Deep liquidity pools allow liquidity providers to earn rewards for market-marking in swap fees and leverage trading fees. A solid liquidity base would allow users to finally enjoy a wholesome DeFi experience on Polkadot. The cornerstones for efficient trading, risk management, and overall success of the network consist from:

Decentralized exchanges (HydraDX, StellaSwap)
Lending and borrowing (Moonwell, Prime)
Perpetual DEXes (Beamex)
Liquid staking derivatives (BiFrost, vested $DOT solution)

In this environment, adequate liquidity depth is crucial to facilitate smooth order execution, especially during times of high volatility when market movements can be rapid and unpredictable. Deep liquidity ensures traders can enter and exit positions without slippage, maintaining fair pricing and preventing cascading liquidations.

Full proposal can be read here.

This proposal will run in parallel with Beamex PERPadot: Liquidity Incentives, a 500,000 DOT liquidity incentive program to attract liquidity and onboard new users to the Polkadot ecosystem by giving them significant liquidity depth for Perpetual trading.