Market Making Initiative Fund
Project Name: Market Making Initiative Fund
Project Manager: Syscoin Foundation
Request Amount: 500,000 SYS per month
Time: Three Months
Voting Deadline: 18th May, 2026
Vote Yes
gobject_vote_many 3a1912c40d5ab1b43ebf4f182dcb863d8ad0cf240ebcb35b9056ac88327f3805 funding yes
Vote No
gobject_vote_many 3a1912c40d5ab1b43ebf4f182dcb863d8ad0cf240ebcb35b9056ac88327f3805 funding no
Overview
This proposal requests governance funding to establish a dedicated Market Making Initiative Fund for the Syscoin ecosystem.
The current monthly governance budget has approximately 500,000 SYS/month unallocated. This proposal requests that remaining amount for a three-month period, aligning with the remaining term of the current SMT and Foundation proposals.
The purpose of this initiative is to strengthen SYS market liquidity, improve trading conditions, and support a healthier market structure around Syscoin as the ecosystem continues its transition into the zkSYS and EdgeChain phase.
This proposal is being submitted by the Syscoin Foundation following coordination with the relevant ecosystem teams. Existing funded teams have agreed to reduce or redirect portions of their current governance allocations toward the Market Making Initiative Fund.
Background
The current ecosystem funding cycle includes several active proposals, including the SMT ecosystem operations proposal, which requested 3,500,000 SYS per month over six months, and outlined a prior operational budget of approximately $68,500/month.
Since then, SMT has significantly reduced infrastructure and team compensation costs, bringing its operating budget down to approximately just under $30,000/month. This reduction allows part of the existing SMT allocation to be redirected toward a market making initiative without compromising essential operations.
The Syscoin Foundation has also reviewed its current funding requirements and will reduce its retained monthly allocation to 200,000 SYS/month, which will be used to continue covering essential legal costs. The remaining Foundation allocation will be redirected to the Market Making Initiative Fund.
SUPR has similarly reduced its retained allocation and will keep 100,000 SYS/month for necessary server and infrastructure costs. The remaining SUPR allocation will be redirected to the Market Making Initiative Fund.
Together, these reductions allow existing governance funds to be consolidated into a focused liquidity program for the benefit of the broader Syscoin ecosystem. The initiative is intended to improve SYS market liquidity, strengthen trading conditions, and support healthier market structure during the current proposal cycle.
Strategic Rationale
Market liquidity is critical for a functioning ecosystem. Stronger liquidity supports:
- Lower slippage for SYS buyers and sellers
- More stable market conditions
- Improved confidence for exchanges, partners, builders, and community members
- Better conditions for future ecosystem growth
- Stronger positioning around zkSYS, EdgeChains, and broader Syscoin adoption
As Syscoin enters an important execution phase, market structure is a key piece of ecosystem readiness. This proposal creates a dedicated, short-term fund to address that need directly.
Funding Sources
The Market Making Initiative Fund will be supported by both a new governance proposal and redirected funds from existing ecosystem proposals.
New Governance Request
| Source | Amount |
|---|---|
| New Market Making Initiative Fund proposal | 500,000 SYS/month |
Redirected Existing Proposal Funds
| Source | Current Monthly Allocation | Retained | Redirected to Market Making |
|---|---|---|---|
| New proposal | 500,000 SYS | 0 SYS | 500,000 SYS |
| Foundation | 350,000 SYS | 200,000 SYS | 150,000 SYS |
| SMT | 3,500,000 SYS | 3,000,000 SYS | 500,000 SYS |
| SUPR | 325,000 SYS | 100,000 SYS | 225,000 SYS |
Estimated monthly Market Making Initiative Fund:
1,375,000 SYS/month
Estimated three-month total:
4,125,000 SYS
These redirected amounts are based on current team coordination and may be adjusted if operational requirements or price change.
Community Participation in the Market Making Initiative Fund
In addition to governance funding and redirected ecosystem proposal funds, several community members have also joined the Market Making Initiative Fund by loaning SYS into the initiative.
These community-contributed SYS funds will be locked under a 12-month contract and used to support the broader market making strategy. This strengthens the initiative by increasing the available liquidity base beyond governance funding alone.
The agreed APR for community and team SYS loans is 6% annually.
APR payments may be funded through:
- Profits generated from market making activity
- Governance funding, if required
- A combination of both, depending on market conditions and initiative performance
The purpose of this structure is to allow aligned community members to support SYS liquidity while receiving a modest fixed return for committing their SYS to the initiative for a defined period.
Any additional community members who would like to participate in the Market Making Initiative Fund can contact the Syscoin Foundation to discuss availability, terms, and onboarding requirements.
Scope of the Initiative
The Market Making Initiative Fund may be used for:
- Professional market making services
- Liquidity provisioning
- Exchange liquidity support
- Market structure improvements
- SYS liquidity management across relevant venues
- Operational costs directly tied to market making execution
- Reporting, monitoring, and performance review
- APR payments for SYS loaned into the Market Making Initiative Fund by participating team and community members
The fund is not intended for general team compensation, unrelated infrastructure spending, or non-market-making activities.
Timeframe
This proposal is for three months.
The three-month period aligns with the expected remaining duration of the current SMT and Foundation proposal cycle. After this period, new proposals are expected to be submitted by the Foundation and SMT, at which point the market making initiative can be reviewed, renewed, adjusted based on performance and ecosystem needs.
Governance and Oversight
The Syscoin Foundation will coordinate the Market Making Initiative Fund and oversee the use of funds.
The Foundation will aim to provide transparency around:
- Amounts allocated
- Market making counterparties or service providers, where disclosure is appropriate
- General use of funds
- Ongoing liquidity objectives
- Any material changes to the initiative
Due to the nature of market making, some operational details may need to remain confidential to avoid exposing strategy, venue-specific activity, or sensitive market operations.
Expected Outcomes
The expected outcomes of this initiative include:
- Improved SYS liquidity
- Reduced slippage
- Stronger order book depth
- Better trading conditions across supported venues
- Improved confidence for ecosystem participants
- Better market readiness during the zkSYS and EdgeChain transition period
Conclusion
This proposal establishes a dedicated Market Making Initiative Fund using the currently unallocated 500,000 SYS/month governance budget, combined with redirected funds from existing ecosystem proposals.
The initiative is designed as a focused three-month liquidity program while the current SMT and Foundation proposals complete their remaining term. It reflects coordinated action across ecosystem teams to prioritize market structure, liquidity, and long-term ecosystem health.
We request the community’s support for this proposal to strengthen SYS liquidity and improve market conditions during this important period for the Syscoin ecosystem.