Authors
4 Years Locked. veMAXI
Summary
Delay the launch of AMO’s on all 4 Pools (USDC, USDT, FRAX, UST) across all chains and limit FRAX protocols exposure to $50m total.
Background
Im sure many of you are aware that FRAX has been pushing forward with its adoption and building partnerships with many other protocols.
One of them partnerships is with the Terra Luna protocol. The FRAX team and the Terra team have been working together to plan and build the 4 pool. The 4 pool has been deployed on a hand full of chains already and FRAX protocol has already deployed $25m in assets (total) to these pools.
Going forward
As the 4 pools grow and see adoption FRAX is planning to deploy AMO’s to these pools and increase the funds deployed in each pool.
The Risks
It has become clear in the last few days that UST is having trouble holding its peg (dropping to <$0.70) and is currently valued at $0.82 as i type this.
Any funds we add to the 4 pools could be used as exit liquidity if UST implodes and we will be left holding the worthless remains of UST.
The proposal
I propose we delay the lunch of the 4 pool AMO’s until UST can re-gain its $1 peg and spend more then 1 month trading at peg.
I also propose we limit the total amount of FRAX protocol funds in 4 pools to $50m total across all 4 pools. This limit can be removed once AMO’s are deployed.
*1 month at peg = 1 month where price remains within 0.98-1.02
Voting options
FOR = Delay AMO’s and restrict investment to $50m total.
AGAINST = Start AMO deployment process as normal.