FIP 32 Adjust veFXS boost ratio to catch up with rising FXS price

With the rising FXS price it becomes ever harder to enable a full farming boost.

With the current FXS price at 18$ people are required to lock up 18$ value for 4 years in order to be able to fully boost 2$ worth of LP.
This asymmetrical ratio will only keep increasing with further growth of the FXS price.

As this continues people will be less inclined to buy and/or lockup FXS (It’s just not efficient capital deployment anymore).

The boosting element is easily one of the most attractive aspects of FXS and I believe it is one of the main reasons why we got to see 75% of the circulating FXS supply get locked up.

In the current situation newcomers and even OG’s are priced out of this very aspect, it is simply not attractive anymore for anyone to lock up their FXS.

My proposal is to adjust this ratio to decrease the current asymmetry.

Current ratio setting: 4veFXS boosts 1 FRAX. (2$ of LP)

I suggest we start discussing here and try to find a fitting ratio and create a balance to operate between the fine lines of:
-veFXS boost being too easily attainable- = low FXS buy demand because people don’t need many.


-veFXS boost being too hard to attain- = low FXS buy pressure because the risk is not worth the reward. (current situation)

One idea would be to find a way for this to be automatically adjusted in accordance with the fluctuating FXS price. We just need to find that golden ratio.


i think its best to vote in a simple change first and then plan something automated.

maybe drop it to 2veFXS o boost $2 LP , for now.

this will still be a pretty bad rate , but 100% better then what we have now.

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Yeah, I agree maybe doing the adjustment step by step may be a good idea. That way we’ll find out a good ratio eventually.

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one thing i would advise is to limit any vote to a yes or no , rather then a number of options.

this is because some people do want to change it and some people dont, but if you split the vote up then all the people that do will all vote for different things.

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maybe we could have a gauge for the ratio.

could start at 2 veFXS and then every week people vote to increase 10% it or decrease it 10%

I agree that it makes sense to change it in a way that it keeps being attractive when the price of FXS would increase, and go back down when it decrease.

I very much prefer a formula that automatically adjust the ratio with FXS price increases/decreases instead of having to constantly vote on it.

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Also very much in favor of a formula that works no matter the price of FXS going forward. This makes the most sense as the less human governance the better.

Very much in favor of this. I am a new owner of FXS and LP in UNI USDC/FRAX pool and it’s pretty much pointless for me to lock up my FXS given that it needs to be a large outsized position to warrant giving my LP a boost. It just doesn’t warrant the lockup from my perspective.

Lowering the boost will be somewhat important in my mind since the weekly rewards are about to be halved.

Not in favor, your calculations only goes of 1 farm, while there are many farms u can boost.

Thanks @FraxiG for posting this. I agree that the ratio will eventually need to be changed if the veFXS boost is to remain relevant. An obvious example that Sam shared - if we have whitelisted entities stake veFXS, they would need an impossible amount of veFXS to get the max boost on $100m of deposits.

After checking with the team, we will need to vote on this parameter via governance for the foreseeable future - it is not feasible to make it dynamic at this point in time. So we know it needs to increase, the question is by how much.

It appears prudent for us to be slow in making this adjustment (i.e. ease into a larger adjustment over time) to prevent unintended consequences. The naive approach would be to do $4 veFXS per 1 FXS but that would be a huge increase based on the current price of FXS. We could use a trailing price for the last 30 days (for example) but that would also yield a substantial initial increase. After thinking about it from a number of different angles, perhaps we should start with a 3x increase and see how things go. We can always increase it more if things work as intended. I am very open to feedback if others have a different approach in mind.

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shame we cant change the voting to a snap shot (no fee) and then give people a boost for voting each week.

i feel this would get investors to visit the app more often and would give smaller investors more reason to hold veFXS.

right now an investor with $1-10k has no reason to buy veFXS or vote as they would get a much better return buy using all the funds in 1 pool with no boost, but if voting for the gauge was free and they where given something just for voting then it would attract more people to put something in the veFXS pool and joining in with governance and gauge voting

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hey @sparkes25 - I assume you’re referring to the gauge weight votes (changing the veFXS boost ratio which is a separate issue could be done via snapshot). For the gauge weight vote, I do appreciate having it on chain for the autonomy and transparency of the system, though at the moment gas is prohibitively expensive for smaller users. A third party veFXS aggregator could let users snapshot their votes and aggregate it into their final gauge weight vote. Longer term I’m assuming this will move to L2.

Totally agree. I locked in my starter position in FXS without realizing how little sense it makes at current rates. Looking at buying more I simply can’t justify buying and locking any amount of FXS less than $25k-50k, plus then putting more in an LP.

This puts up huge barriers to otherwise great potential community members who don’t have that type of money. I think it’s a “problem” if the idea is to have anyone be able to own FXS and participate in its governance.

I will be proposing a brand new Frax gauge v2 concept that has improved boosting mechanics and new features in the next few days that addresses this exact problem in a more dynamic way. My proposal will be a new gauge farming spec that we can apply for all newer launched Frax gauge farms moving forward if it passes by FXS voters. I’d highly recommend you guys wait a few days to check out this model I am working on before putting the current veFXS boost ratio to a formal snapshot vote :slight_smile:


Can attest, haven’t personally locked my FXS exactly because of this - $20 boosting $2 just doesn’t provide enough incentive