In the past years, Snowbridge has been focused mainly on engineering, building out Snowbridge’s capabilities to be the best trustless Polkadot-Ethereum bridge available. With Snowbridge now maturing, our team is shifting gears to focus on growth - both for Snowbridge itself but also for the Polkadot ecosystem overall.

Snowbridge is currently at $60M, but we want to see it grow to levels hundreds of millions over the next few years and to become a clear force for growth of DOT across the wider DeFi ecosystem.

Here are our plans for concrete initiatives we will pursue to grow adoption and TVL in the next year and beyond:

1. Treasury Diversification

Snowbridge provides the treasury with an opportunity for much wider diversification of its assets as well as access to yield-generating assets and protocols that can directly grow the value of treasury assets and allow the treasury to directly interface with the wider DeFi ecosystem.

These include:

• Diversification: Blue-chip assets like ETH, WBTC/TBTC, PAXG (gold) to hedge against market conditions and have more robust overall treasury management.
• Simple Yield-Generation: Simple yield-generating assets, like USDS, stETH, USDE allowing the treasury to generate significant yield on the stables it holds from protocols with the highest and safest yields.
• Treasury Market Making: Placing liquidity positions into secure, highly reputable protocols like Uniswap, Balancer, Morpho, Sky and Ethena across various chains could make new markets for DOT and generate fees and rewards that bring even higher yield and diversity to the treasury, allowing it to access new found opportunities.

All of the above are examples of what we believe are safe, low risk and secure blue chip assets and protocols that expose the treasury to minimal additional risk and that can be withdrawn almost instantly at any time. Given that risk profile, we believe it could be justified to deploy something on the order of magnitude of $10s of millions across these areas, and we plan to put proposals through to do so this year.

We also believe that this kind of diversification could ignite new network effects for DOT and Snowbridge, described below.

2. Baseline Liquidity

We believe that deploying a baseline amount of liquidity (eg: $300k) across all major assets, protocols and chains. This could be done, for example, in 25 pools across the top 5 assets and top 5 Ethereum Layer 2 chains and mean frictionless, low slippage access to DOT from anywhere.

More importantly, we believe that this level of baseline liquidity may be an essential ingredient to ignite a network effect that stimulates a much healthier trading and DeFi ecosystem for DOT.

By enabling trading activity across a diverse amount of pools, price differences in those pools are more likely to emerge and thus more arbitrage opportunities will emerge, further creating demand for swapping and bridging and growing both Snowbridge activity and DOT trading volume.

Of course, splitting up liquidity does mean more slippage, but we think that this kind of baseline market making is a needed ingredient to stimulate initial volatility, trading and arbitrage competition that can then ignite a healthier more active market for DOT.

We think this would also result in increased volume and benefit to Polkadot-based exchanges like Hydration and StellaSwap, as this wider diversification of trading pools would create more arbitrage and volatility that connects to the Polkadot markets too.

As mentioned above, this treasury market making would only use safe, low risk and secure blue chip assets, chains and protocols that pose minimal risk to treasury assets and would additionally generate fees and rewards for treasury yield.

For those that are skeptical — remember, this is a low risk, easily reversible action. It’s basically a free option for Polkadot to explore, since if it doesn’t work out, all the liquidity can be quickly recovered without much loss if done correctly.