Re-deploy the USDC Frax Pool to only allow minting of FRAX when the price is above the peg window, and redeeming when the price is below the peg window.
The current version of the Frax Pool released at genesis allows for minting and redeeming of FRAX at the collateral ratio. As the system has grown over the past 8 months while holding the peg perfectly, the demand and depth of liquidity for FXS has increased respectively. Since mints and redeems offer the swap of FRAX to FXS + USDC at no slippage, arbitrageurs may profit off of FXS volatility by arbitraging against the Frax Pool.
To fix this, we are proposing to update the Frax Pool implementation to match the AMO specs listed in the documentation so that minting and redeeming are able to be called by the public only when the FRAX TWAP deviates outside of the peg. FRAX will still be able to be traded at the peg in the curve pool, which will act as the first and primary source of liquidity for the protocol. This proposal protects the FXS price long-term.
Additionally, we are implementing the passed FIP-15 update to buyback with this new Frax Pool improvement.
Lastly, the recollateralize function will also target the new CR by minting FXS and selling it for FRAX thus increasing the CR. This is the exact symetrical specs to FIP-15 for the buyback function.