Stargaze Community Loan and LBP

This proposal includes the details regarding the loan of OSMO to Stargaze’s multi-sig and the parameters of the LBP. By voting Yes on this proposal will signify approval for both a loan of OSMO to Stargaze, and Stargaze will then launch and LBP with the following parameters with that funding. The request for a loan of 135,000 OSMO (~$724K) from the Osmosis community treasury to a multi-sig controlled by community members. Stargaze will use this OSMO to launch a 95/5 Liquidity Bootstrapping Pool (LBP) on Osmosis.

The members of this multi-sig will include:

• James Parillo, Figment
• Shane Vitarana, Stargaze
• Cosmostation

Based on the LBP mechanics and OSMO volumes, the starting price of STARS will be $0.28. Stargaze will pay back the value of the original loan in STARS once the LBP has ended. There will be a 0.3% swap fee - Osmosis and Stargaze community pools will split the rewards of this fee 50/50.

Osmosis multi-sig public address: osmo1s3unu92e8zv8mfw7n5d4vrgkj9chn7yv0sh8rw

Stargaze multi-sig public address: stars1s3unu92e8zv8mfw7n5d4vrgkj9chn7yvnhn27d

Background: LBPs are a way to ensure a fair distribution of tokens at launch and to discover a fair market price of the token with low capital requirements. A 95/5 pool will have 95% of STARS to 5% of OSMO value. Over a period of 3 days, the goal is for the pool to reach 50/50 value. LBPs allow teams to build liquidity without a large amount of upfront capital. It also separates the mechanisms for distributing tokens from the token price. This will be the first community pool loan for Osmosis and Stargaze. Liquidity pools work within the crypto space with automated market makers, providing token holders and networks with liquidity through decentralized mechanisms. Liquidity pools usually only have a 50/50 ratio, where the value of Asset A equals the value of Asset B.

Potential Risks: If there are no purchases for STARS, the price would fall to zero as the weighting decreases and the fluctuation in weighting creates constant downward pressure on the price.

Details about the LBP: Start Time: December 16th, 2021 19:00 UTC End Time: December 19th, 2021

Starting Liquidity: 50,000,000 STARS and 135,000 OSMO

Start Ratio: 95/5 End Ratio: 50/50

Starting Price: STARS Price: $0.28 USD OSMO Price: $5.50 USD