Proposal to list BNC on the HydraDX Omnipool

Omnipool pallet address on HydraDX chain:7L53bUTBbfuj14UpdCNPwmgzzHSsrsTWBHX5pys32mVWM3C1

Requested Amount: 700,000 BNC (~$111k at time of writing)
Note: These funds will remain in control of Bifrost governance.

Short Summary
We propose to use BNC from Bifrost treasury and provide it cross-chain into the HydraDX Omnipool as an LP position controlled by the Bifrost governance. The intent is to seed initial liquidity and start trading BNC in the HydraDX Omnipool natively and efficiently within the Polkadot ecosystem; complimenting vDOT and helping Bifrost users interact with the network. As HydraDX governance has approved to support Bifrost by adding ~$1M of vDOT to the Omnipool - we feel that the addition of BNC from the Bifrost treasury will go some way to reciprocating that support and strengthening the ties between the two protocols.

Detailed Description
BNC will be provided as an LP position into the Omnipool - trustlessly and without losing control of the funds. The BNC position can be withdrawn at any time by the Bifrost governance and BNC sent back to its treasury. All made possible by XCM.
Important fact to realize is that this model is superior to alternatives, where teams have to spend capital to be listed on CEXes or aquire the other half of the pair for seeding common fragmented XYK pools on other DEXes.

Note on Efficiency**
We consider the requested amount as bare minimum but we recommend to extend the position for better capital/trading efficiency. To put some perspective on this, on $1000 trade you currently get:
USDT/DOT ($440k liq): 0.27% price impact
USDT/iBTC ($470k liq): 0.25% price impact
USDT/ZTG ($140k liq): 0.74% price impact

Technical details
The process consists of these steps:
Bifrost governance approves & executes a proposal to send BNC via XCM to the HydraDX Omnipool account (a system account with no private key)
HydraDX governance launches a council motion which is fast-tracked and enacted in 3-4 hours
After step 2 is complete, BNC becomes tradeable within the Omnipool. Sender (i.e. Bifrost sibling account), is set as the LP position holder so it can control the position via XCM Transact calls.

Background
What is HydraDX?
HydraDX is a next-gen DeFi protocol which is designed to bring an ocean of liquidity to Polkadot. Our tool for the job the HydraDX Omnipool - an innovative Automated Market Maker (AMM) which unlocks unparalleled efficiencies by combining all assets in a single trading pool.
Video content:
Kusamarian - HydraDX overall
Kusamarian - HydraDX usage & efficiency

Alignment to the Mission of the Bifrost DAO
Cross-chain communication and cooperation is one of the core principles of Polkadot. Both sides, the Bifrost DAO and HydraDX DAO, will benefit from moving this proposal forward. With growing liquidity and number of listed assets in the HydraDX Omnipool, everyone will be able to gain access to a decentralized, permissionless and frictionless way to trade (or accrue value of) BNC with high capital efficiency and low slippage.

Benefits for BNC holders
Users will be able to trade native BNC within the dotsama ecosystem, no need to use CEXs or bridge to Ethereum anymore.
Omnipool will allow:

• Trading BNC vs. any other asset in the Omnipool (currently HDX, DOT, DAI, ZTG, wETH, iBTC, wBTC, native USDT, ASTR + a lot more in the pipeline)
• After the introduction of other Bifrost ecosystem assets such as vDOT, vETH, etc. the benefits will increase exponentially as their markets improve against each other and all other assets
• Single-sided LPing
• OTC trading
• Cross-chain transfers

In a very short-term horizon (expected June 2023):

• DCA (dollar-cost averaging) - allowing your supporters to gradually accumulate BNC during the bear market
• Liquidity-mining
• Dynamic fees - improving potential profitability of your position in the Omnipool
• In mid-term horizon:
• Stableswap pools
• Order batching
• Staking

Long-term vision include bonds, money-market, liquidation engine and other exciting features that a DEX with cutting edge tech on Polkadot can bring.

Summary
HydraDX and Bifrost are two protocols that can cement themselves at the heart of Polkadot DeFi as things inevitably heat up - HydraDX Omnipool as the main hub for all Polkadot liquidity, and Bifrost as the main provider of LSDs within the ecosystem. HydraDX can support Bifrost by adding deep liquidity of vDOT and potentially other LSDs in the Omnipool - significantly boosting adoption of these products; and Bifrost can support HydraDX by adding a reasonable amount of BNC liquidity into the Omnipool.

Website:
HydraDX