[FIP - 303] Implement ragequit function for VST-FRAX Gauge locker with 7% fee

Governance Proposals Gauges
1

Authors

@ankhrypto

Summary

Implement VST-FRAX Gauge ragequit function with 7% withdrawal fee.

Background and Motivation

The Vesta-Frax VST-FRAX pool was a popular stable pool on Arbitrum, contributing to liquidity provision and stablecoin swaps. However, the protocol is set to wind down in Oct 17 2023 as seen here .

In light of these developments, this proposal seeks to introduce a “ragequit” mechanism to the VST-FRAX Gauge on Arbitrum, allowing lockers to exit the pool without a penalty. This feature will offer liquidity providers an organized route to withdraw their assets from the pool, considering the evolving context driven by sunset of Vesta protocol.

I recreated this proposal because discussion has fizzled out about it and no new proposal has arisen, all while many people’s liquidity (including mine) is held hostage by Frax due to the will of the few managing Convex governance.

Why 7% fee?

Lockers respected all their obligations and willingly made a commitment to Frax, and while I feel it is unfair to charge any withdrawal fee in this case, this proposal will not pass without one, leaving us hostage. Considering lockers are equally being deprived of many years of yield they were promised, a 7% fee should be a reasonable amount to pay for the early unlock of these assets.

If anyone feels this should be higher, feel free to discuss it, preferably before this goes to Snapshot.

Pool Details

LP Token: 0x59bf0545fca0e5ad48e13da269facd2e8c886ba4
Gauge: 0x127963a74c07f72d862f2bdc225226c3251bd117

Vote

• For: Implement the ragequit function with 7% fee.
• Against: Do Nothing

1 Like
2

I honestly have no idea where the ragequit fee determination comes from. I’m down for whatever fee the community deems reasonable considering the alternative is getting nothing out.

3

Thanks for posting a new governance proposal.

I assume the die-hard fraxers will answer “bro we have always made 20% rage quit fee, why not doing the same”.

The thing is the situation is different from other situations, as here it’s not a mere trading decision from users to exit (usually the 20% rage quit fee is a way to walk back on an initial commitment to go farm other opportunities)

In this case, if no rage quit, as Vesta will disappear, that means the whole value of any LP will go to zero. The 20% fee, in that case, sounds like blackmail to the LPs “Pay me 20% or lose everything”.

I am in support of such governance proposal

4

This proposal is up for voting here: Snapshot

5

The obligation is a time lock. what obligations are you refering to?

What promise are you refering to? Frax promised a gauge which is still running?

6

There is a redemption contract. How would value go to 0?

7

Because the redemption stops in 2024.

So if no rage quit before the deadline, it will go to zero.

8

The time lock. Users are not so much choosing to leave so much as the protocol sunsetting. The users themselves locked in good faith and stayed locked.

A gauge which was down to less than 1% yield, yes you can say that was not a promise, I could say yes but it was an expectation, and wherever we get to will have been a waste of time arguing over this (also noticed somehow it’s back to its previous state, so now this is a moot point).

In any case, it is not useful for the protocol (Frax) to incentivize 2M worth of liquidity paired with a dead stablecoin, at the current yield this represents 200k-600k in emissions that are not useful to Frax. It is in the interest of all parties to allow ragequit, although this considered it should be accompanied with shutting down the gauge and I will make a further proposal to do so if this passes.

In fact, considering the yield has returned to expected rates it is further in Frax’s interest than ours to shut it down, so I would say 7% is very reasonable.

9

please link to info that shows redemptions will be stopped and vst become worthless. forum posts/contract addresses etc

10

I don’t think that’s factual, but hopefully I’m not wrong :sweat_smile:

11

Expectation on Vesta to get the gauge weighted, sure. That’s not an expectation on Frax though.

12

Either way… :point_up:

Yield is 10-30%, like it has been for the past 3 months, do you have any constructive thoughts on the matter?

13

The finality of it on the Frax end remains: emissions on liquidity paired with a dead protocol, that could go towards actually useful gauges.

14

Hey here it is:

TL,DR:

  • Vesta set up an accelerated redemption program to end redemptions by Oct 2024
  • Vesta is starting to tax redemption from April 2024 (starting with a 2% fee, then 5% in July and increasing incrementally et.)

=> If this is not resolved by April, LPers are going to pay a double tax, and if this not resolved by October, will lose everything

15

says highest fee is 10% to the vault of their left over collateral. and redeemer gets that cut. sooo vst actually has slightly more value that 1$ in that respect. and as a vault owner you can withdraw partially to reduce that fee i would imagine

not sure what you want me to read here. this looks to be talking about their gov token redemption

says redemptions are live. okay?

that page said max 10%

Still dont get where you’re getting this from

16

Thanks for posting the new proposal. I feel like I’ve been screwed by Vesta with this and am now being held hostage by Frax. I locked a sizeable amount of stables for the maximum period of time and am now left stuck in this mess. I don’t know the details of what happened with Vesta and was late to find out about them throwing the towel in, but to me it seems only reasonable that LP’ers should be able to exit now if they want to? This isn’t what we signed up for? @C2tP-C2tP - what are your thoughts on what would be an acceptable fee to quit? @samboy - any thoughts?

1 Like
17

It’s so hard to get things moving on this topic

Really feels like Frax team doesn’t really care USD2m worth of LP are being rugged