Add fixed gauge weight for fxUSD/USDC pool and decrease the gauge weights for fETH and btcUSD Stability Pools on FXN Gauge Controller
Summary
We have recently released the whitepaper for f(x) Protocol v2.0 ( https://github.com/AladdinDAO/aladdin-v3-contracts/blob/main/whitepapers/f(x)_2.0_whitepaper.pdf ).
FXN liquidity mining emissions have kicked off with the genesis of fxUSD. Overall emissions are controlled by veFXN voting. Currently there’s a 10% fixed gauge weight for fETH Stability Pool and a 10% fixed gauge weight for btcUSD Stability Pool. The team proposes to reduce the weight for each to 5% and add another fixed gauge weight of 30% to the fxUSD/USDC pool, during v2.0 bootstrapping period.
Motivation
Allocating fixed rewards to the fxUSD/USDC pool is strategic for several reasons, especially given its critical role in the f(x) Protocol v2.0 design. There are three key reasons the team proposes this approach.
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fETH and btcUSD collateral is constant
The fETH and btcUSD collateral appears to be in good shape. Initially, we assigned a 15% weight to fETH Stability Pools to safeguard them during the fxUSD launch, which were decreased to 10% once btcUSD was released and added 10% weight to btcUSD Stability Pools. We believe these measures have served their purpose well, as capital remained stable within fETH and btcUSD. Therefore, we propose reducing the fixed weight by 5% for both fETH and btcUSD. -
Maintaining the fxUSD Peg
By incentivizing liquidity in the fxUSD/USDC pool, we ensure greater stability and resilience for fxUSD. This liquidity acts as a buffer against market volatility, supporting fxUSD’s peg even in fluctuating conditions. Fixed rewards encourage sustained participation, providing the necessary depth to help keep fxUSD stable. -
Supporting xPOSITION Openings
The fxUSD/USDC pool is fundamental to creating xPOSITIONs, as it facilitates users entering single-sided leveraged positions. A strong, liquid pool enables efficient USDC availability, facilitating smooth and cost-effective xPOSITION transactions. This enhances user experience and reinforces the protocol’s core leverage offerings.
In short, fixed gauge weight for the fxUSD/USDC pool aligns participants’ incentives with the protocol’s goals, strengthening the fxUSD peg and enabling seamless leveraged trading—both essential to f(x) Protocol v2.0’s success.
Implementation
If approved by governance, the fixed weight for fETH Stability Pools and btcUSD Stability Pools will be reduced at 5% and the fxUSD/USDC LP will be allocated a fixed 30% weight emissions for each epoch, supporting and stabilising its yields. All remaining FXN emissions would be allocated by the veFXN gauge voting process. These fixed gauge weights would continue until a governance decision to change them is passed.
Pooling
For - I support adding a fixed gauge weight for fxUSD/USDC pool and decrease the gauge weights for fETH and btcUSD Stability Pools on FXN Gauge Controller
Against - Do nothing
Informal Pool
- Yes, I support adding a fixed gauge for the fxUSD/USDC LP and decreasing the weights for fETH and usdBTC SP
- No, I’m against this