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Back #70 Proposed By Elation Studios Dec 21, 2021 Contract GSR to perform Market Making Services for Elastos 1/3 Referred to Suggestion #138 Status PROPOSED Preamble CRC Proposal #70 Title Contract GSR to perform Market Making Services for Elastos 1/3 Proposer Elation Studios Referee Elation Studios Type New Motion Status PROPOSED Created Dec 21, 2021 TxID 4a4f7d16eb3153ef67fedf15c1bc3524080c9a21e61bb183683866c24d8eaaad Hash 34ce088ecdc35cc4ab32897e3759e5d0547a3fae322612aae740800a10a5f707Copy Abstract This proposal outlines an agreement for CYBER REPUBLIC OPERATIONS LLC, on behalf of the CRC, to engage industry leading, market making firm, GSR Markets Limited (“GSR”), for the ELA token. This proposal seeks approval for a LOAN of 700,000 ELA tokens that would be used by GSR to provide liquidity for ELA tokens listed on GSR supported exchanges (CEX & DEX) over a 2-year period. A significant portion of this requirement was secured and/or donated privately to the CYBER REPUBLIC OPERATIONS LLC, hence the loan request put forward to the CR Council is for a total of 370,000 ELA tokens.

Based on the current price of ELA ($2.45) the value of 700,000 tokens would be $1,715,000. Elation Studios was able to negotiate a highly competitive and attractive rate whereby, in the event GSR exercise all 4 options (each option exercisable every 6 months) the amount returned by GSR to the CR Treasury over the 2-year period would be $10,600,000, an increase of $8,885,000.

In the event no options are exercised, GSR will return in full the initial 700,000 ELA loan to the CR Treasury.

Motivation image Cryptocurrency Market Makers:

Market makers play an important role in increasing the accessibility and liquidity of cryptocurrencies to traders, investors, and market participants around the world. Market making is an activity whereby a trader simultaneously provides liquidity to both buyers and sellers in a financial market. Liquidity is the degree to which an asset can be quickly bought or sold without notably affecting the stability of its price.

What are the benefits of crypto market making?

Markets that have low liquidity will generally have wide bid-ask spreads in their order books, which can increase the volatility of the asset. Therefore it makes it more difficult for traders to get a good price for their trade, and have their orders filled. The overall liquidity of a market greatly influences its growth, and market makers play a big role in ensuring liquidity. Simply stated, the liquidity of an asset is its availability for buyers and sellers to easily trade it at any given time. ● Increases market liquidity and order book depth ● Reduces price volatility ● Assists with fair price discovery ● More efficient bid-ask spreads in cryptocurrency exchange order books ● More orderly entry and exits points for traders ● Reduces slippage ● Helps accommodate large institutional investors ● Mitigates dramatic price swings

Why GSR?

GSR was founded in 2013, and has since built a proprietary trading system, often trading over $5bn a day across the cryptocurrency ecosystem. GSR’s trading platform is connected to over 60 cryptocurrency exchanges and is integrated with major DEX’s and lending protocols. GSR employs close to 200 people, predominantly engineers and traders, and has collected eight years of market data that it has used to continuously develop and refine its trading engines and programmatic execution capabilities. ● Robust Liquidity – spread and order book KPIs ● 60+ exchange integrations ● Through a thorough examination of exchange and trading ecosystem, it sets achievable goals ● The GSR team has experience trading with established and nascent projects ● The GSR software measures performance at a granular level, allowing for full visibility and flexibility ● GSR is a founding member of ADAM, the leading SRO in the US dedicated to the development of fair and orderly markets ● Daily market reports are available to Elastos, as a trading counterparties

Goal Contract GSR to perform Market Making Services for Elastos:

● Contract term - 24 months ● Contract covers CEXs on which ELA is listed and that GSR is integrated with. Choice of CEXs on which GSR will endeavour to provide liquidity is at GSR’s discretion. GSR and the CRC may also agree one or more DEXs on which GSR will endeavour to provide liquidity. ● Exchange trading fees are covered by GSR ● ELA tokens loaned to GSR: 700,000 ELA ● Repayment Rights: In lieu of GSR returning the loaned ELA at termination of the agreement, GSR has the right to repay a proportion of the loan on four repayment dates. These repayments will be made in USDT (or equivalent stablecoin, crypto or FIAT as decided by the CRC (to be agreed with GSR)) at an agreed level which will be set in advance by reference to i) a fixed USD price or ii) (x) an “at-the-money”/market price plus (y) a premium (to be agreed with GSR) upon exercise of the repayment right and no later than 3 days after such exercise. ● Most major exchanges require a market-maker, and where appropriate, GSR will help with introductions to CEX’s for possible listing consideration ● Provide liquidity for any new listing on supported centralized exchanges, using commercially reasonable efforts. ● GSR will investigate providing Market-Making services for Glide (Elastos DEX). This will require integration into Elastos, so will not be available on day one of contract starting ● GSR can work with existing Market Makers on exchanges (that is normal for larger projects) ● GSR will use the loan solely to provide liquidity to ELA markets, it will not be staked ● Receive 24/7 coverage, daily/weekly/monthly reporting showing full trading transparency, weekly calls with account manager and a dedicated TG chat

Implementation Plan Milestones #1 Jan 5, 2022 Sign market making contract with GSR

#2 Jan 19, 2022 GSR begin market making services (approx. 2 weeks after contract is signed)

#3 Jul 18, 2022 GSR option to exercise 1st tranche expires (exact date 6 months from go-live). Proceeds from any exercised options paid to CRC within 3 days.

#4 Jan 18, 2023 GSR option to exercise 2nd tranche expires (exact date 6 months from tranche 1 expiry) Proceeds from any exercised options paid to CRC within 3 days.

#5 Jul 18, 2023 GSR option to exercise 3rd tranche expires (exact date 6 months from tranche 2 expiry) Proceeds from any exercised options paid to CRC within 3 days.

#6 Jan 18, 2024 GSR option to exercise 4th tranche expires (exact date 6 months from tranche 3 expiry) Proceeds from any exercised options paid to CRC within 3 days.

#7 Jan 22, 2024 GSR to return any remaining ELA loan amount back to the CRC.

Implementation Team Team Member Role Responsibility More Info Elation Studios Project Management Manage contract execution, on-boarding and on-going relationship with GSR over the 2-year period via Cyber Republic Operations LLC

...... Show More Plan Statement Based on the current price of ELA ($2.45) the value of 700,000 tokens would be $1,715,000. Elation Studios was able to negotiate a highly competitive and attractive rate whereby, in the event GSR exercise all 4 options (each option exercisable every 6 months) the amount returned by GSR to the CR Treasury over the 2-year period would be $10,600,000, an increase of $8,885,000.

In the event no options are exercised, GSR will return in full the initial 700,000 ELA loan to the CR Treasury.

The requested budget for this proposal will be 370,000 ELA tokens. Due to the 10% treasury cap per proposal, a total of 3 proposals will need to be submitted for approval (125k, 125k and 120k)

Relevance Budget Total Budget (ELA) 125000 ELA Receive Address EWhNNRbo8PpFo7tkPX4Ce4rCkHv9SV1tQu Payment Schedule 1 125000 ELA Project Initiation Payment Goal: milestone #1 Criteria of Payment: 125k of 370k ELA

2 0 ELA Project Milestone Payment Goal: milestone #2 Criteria of Payment: 0

3 0 ELA Project Milestone Payment Goal: milestone #3 Criteria of Payment: 0

4 0 ELA Project Milestone Payment Goal: milestone #4 Criteria of Payment: 0

5 0 ELA Project Milestone Payment Goal: milestone #5 Criteria of Payment: 0

6 0 ELA Project Milestone Payment Goal: milestone #6 Criteria of Payment: 0

7 0 ELA Project Completion Payment Goal: milestone #7 Criteria of Payment: GSR to return any remaining ELA tokens to the CRC

Budget Statement Proposal 1 of 3 requesting 125k ELA Tokens (370k total sought)

Translate in: English | 简体中文 Council Members Votes Yes voter avatar Ryan | Starfish Labs Chained Easiest yes of the year. Translate in: English | 简体中文 voter avatar Rebecca Zhu Chained Easiest yes of the year

Translate in: English | 简体中文 Undecided voter avatar Sunnyfenghan

voter avatar Zhang Feng

voter avatar Jingyu Niu

voter avatar The Strawberry Council

voter avatar Orchard Trinity

voter avatar Elation Studios

voter avatar SJun Song

voter avatar Donald Bullers

voter avatar Mark Xing

voter avatar Brittany Kaiser

Budget tracking Status tracking

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