# Governance Proposal to increase the reserve fraction to improve on-chain liquidity

**URL:** https://forum.celo.org/t/governance-proposal-to-increase-the-reserve-fraction-to-improve-on-chain-liquidity/556
**Category:** Governance
**Created:** [July 13, 2020, 7:08pm UTC](https://forum.celo.org/t/governance-proposal-to-increase-the-reserve-fraction-to-improve-on-chain-liquidity/556 "2020-07-13T19:08:51Z")
**Posts on this page:** 1
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### Author: ![henryzhang](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.celo.org/henryzhang/32/144_2.png) [@henryzhang](https://forum.celo.org/u/henryzhang)
#### Post date: [July 13, 2020, 7:08pm UTC](https://forum.celo.org/t/governance-proposal-to-increase-the-reserve-fraction-to-improve-on-chain-liquidity/556/1 "2020-07-13T19:08:51Z")

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Hello everyone,

cLabs has submitted a governance proposal to increase the exchange parameter `reserveFraction` to 0.5% (from 0.1%). This change increases the on-chain cUSD/CELO liquidity by increasing the bucket-sizes in the Uniswap-style exchange mechanism.

Since the [stability protocol was enabled](https://forum.celo.org/t/governance-proposal-to-activate-celo-stability-protocol-and-enable-cusd-transfers/547), we have gained confidence that the on-chain exchange between cUSD and CELO is working as intended. The proposed change will allow Celo users to execute larger trades, and enjoy decreased slippage and price movements. As the liquidity of cUSD and CELO increases, cLabs may further increase `reserveFraction` in the future.

You may learn more about the details and background of this governance proposal [here](https://github.com/celo-org/celo-proposals/blob/master/CGPs/0008.md). Alternatively, you can view the details on-chain via the following command:

```auto
celocli governance:view --proposalID 8 --node https://rc1-forno.celo-testnet.org

```

Anticipated timeline:

- **July 13** : cLabs submits the proposal; CELO holders will have 24h to upvote.
- **July 14** : If dequeued, approvers review the proposals.
- **July 15** : If approved, CELO holders have 48h to vote YES, NO, or ABSTAIN.
- **July 17** : If the proposal passes, the `reserveFraction` will be increased to 0.5%.

If you have any comments or questions we suggest replying here (vs. reaching out on Discord, Telegram, or email) so as to keep the conversation asynchronous and inclusive.

We look forward to hearing your thoughts,

The cLabs team

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_[View the full topic](https://forum.celo.org/t/governance-proposal-to-increase-the-reserve-fraction-to-improve-on-chain-liquidity/556)._