Proposal: Signal to Inject LUNC Liquidity into Osmosis and Astroport (on Terra) to Strengthen Terra Classic Ecosystem

General
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Summary of the Signal Proposal:

This proposal is to signal community intent and initiate discussion around injecting meaningful LUNC liquidity into key decentralized exchanges — Osmosis (Cosmos ecosystem) and Astroport (Terra). By deploying strategic liquidity in these markets, Terra Classic can enhance token accessibility, increase utility, deepen trading infrastructure, and attract broader ecosystem interest.

Motivation: LUNC’s revival and long-term sustainability rely on increasing its on-chain utility, trading depth, and cross-ecosystem presence. Currently, LUNC suffers from limited liquidity outside centralized exchanges, which poses challenges for adoption, DeFi participation, and price stability.

The two main DEX platforms I propose with Reasonings is the following: Osmosis DEX: Enables IBC-based interoperability and liquidity between Cosmos chains High daily trading volumes, active community Exposure to new users and ecosystems

Astroport (on Terra) Terra-native DEX with strong infrastructure and UI Enables intra-Terra liquidity and composability with Terra-based protocols Incentivized pools and governance opportunities

Proposal Goals: Inject targeted LUNC liquidity into select pools on Osmosis and Astroport Promote deeper trading options for LUNC on decentralized platforms Enable DeFi use cases for LUNC (swapping, LP yield, arbitrage, cross-chain bridging) Reduce centralization risks by shifting volume to decentralized rails

Implementation Suggestions: Osmosis: Create or incentivize a LUNC/ATOM | LUNC/OSMO | or LUNC/USTC pool Provide initial liquidity from the community pool or contributors Optionally apply for external incentives via Osmosis governance

Astroport: Add LUNC/USTC | LUNC/USDC | or LUNC/LUNA pool Use Astroport’s incentivization framework to use a small allocation of the Community Pool on top of the Liquidity to Incentivise LP’ers to Provide LP in the Pool

Co-market with Terra Classic community to boost adoption Optional: Apply for Astroport dual incentives or LP bootstrapping incentives via the Terra community pool for the LUNA

Expected Benefits to LUNC: Improved liquidity & price efficiency: Deeper DEX pools reduce slippage, enabling larger, smoother trades Increased DeFi integrations: LUNC becomes usable in swaps, lending, farming, and cross-chain applications Enhanced network visibility: Listing on Cosmos-wide DEXs like Osmosis increases discovery and interest from external communities Long-term sustainability: Reduces reliance on centralized exchanges for price discovery and liquidity Supports USTC Repeg Synergy: Pairing LUNC with USTC may assist in forming organic market-based repeg demand if tied to future burn or minting mechanisms

Risks & Considerations: Impermanent Loss (IL): Liquidity providers may face IL depending on price action Initial capital requirement: May require funding from community pool or coordination from whale participants

Market volatility: Volatile pricing may affect perception of success

Next Steps: Community discussion and signalling approval Identify liquidity source: community pool allocation, DAO coordination, or LP commitments. Coordinate pool creation and liquidity deployment Begin cross-chain and on-chain marketing campaign Begin Signal Proposals on Osmosis and Terra if this is Successful and something the community wants to do.

Conclusion: Injecting LUNC liquidity into Osmosis and Astroport is a crucial step in transforming Terra Classic from a legacy asset into a modern, cross-chain asset with real utility and opens to doors to the two biggest Dex’s in the cosmos right now and could signal future Utility and sentiment towards Terra Classic in the future. This proposal does not allocate funds but signals community intent to explore and move forward with the initiative.

Signed,

Josh | CatWifHat Project

1 Like
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Generally I am all in for the idea.

But this needs to be refined a lot. I think you need to specify exactly what pools and what DEXs you wanna deploy on and under what conditions and how much. Who manages the acquisition of ATOM and/or OSMO? How do you want to manage the LP? Because these are off-chain this time around - no management by Terra Classic gov account possible…

Except… maybe through a specialized IBC contract - would need to search into this…

I have literally no idea about Astroport - please extend on the “dual incentives” thing. What is it? How does it benefit us? What are the chances of an Osmosis prop passing? What is the current volume on Osmosis - so this might be an argument for them to target this prop (or not)

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We all support this proposal. Want LUNC liquidity to be deployed on Astroport and on Osmosis immediately.
All will be managed by: @fragwuerdig
(Multisig wallet from Proposal 12171)

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To be honest. I would rather see more liquidity injection of one of our DEXs before moving liquidity out on off-chain platforms. 50k liquidity seems a lot. But it isn’t.

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Fully agree with this pov. We have just started to deploy in our own chain after 3 years. We can´t just start injecting in others if we yet don´t have enough liquidity in our end. My pov is, follow how this goes and evaluate a round 2 after some time, maybe 3 rounds before thinking on expanding to other chains. That expansion to other chains can (and probably will) come from our own Dexes if they start to grow. This is already being talked in dexes chats.

I do think that an alliance can be made with other chain so both can provide their native coin half of a pool. Example, Osmosis provide Osmo and Terra Classic provides Lunc or USTC. This reduces the risk to half and also the needed capital to be deployed also by half.

1 Like