DAO re-investing anonymity pool

With the goal and incentive of an ever growing anonymity set, the DAO could put some of this money to work. The most risk free would be to provide AMM liquidity with token pairs that TORNADO owns, like DAI/ETH, USDC/ETH via AMMs.

The returns can be used by the DAO to buy back TORN. This way TORN will deflate and have real value.

For the most part, withdrawing staked liquidity to a shrinking anonymity pool shall be automatable.

In the worst case of a money-run, the original balances could be restored manually. In a total emergency the DAO treasury would have to come up for a missing amount.

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providing AMM liquidity is not risk free at all. Impermanent loss could be much higher than profits.

I said “most risk free” :smiley:

But at least for DAI/USDC or other stable pairs impermanent loss would be rather unreal. And there are other very low risk opportunities. Worst case, the DAO would buy lost tokens using TORN, thus inflating the TORN price.

Depegs do happen; even stable-to-stable is potentially subjected to impermanent loss.
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