disagree, things he is talking about and result to vote are not linked tightly
Thank you everyone for the wonderful feedback!
As a next step, I’ll be modifying the post above to only propose pausing FRAX3CRV operations, and we (Mechanism) will propose this as a snapshot vote.
Sam nicely laid out the FXS TWAMM AMO to replace the buyback & re-collateralize functionality in FIP-58, which we recommend voting FOR → FIP 58 - Deprecate Buybacks/Recollateralizations for Fraxswap TWAMMs
Hi, I’m gonna ask again, has anyone any idea/example of how this would work?
I’m not too sure how to answer this. Since Frax governance is offchain for now, it’s up to the core team to implement the spec described in the proposal. Right now, the Convex AMO is regularly minting new Frax into FRAX3CRV and placing extra collateral (USDC) in there as well. The proposal here is a vote to change the AMO behavior so that this isn’t happening. Once that change is implemented, any extra points of CR can be used in AMOs like the FXS TWAMM AMO (see FIP-58) and the upcoming 4pool.
The USDC deposited in the pool isn’t extra collateral, it is used to back Frax supply. Frax currently is using the collateral excess obtained through fees/farming/etc to buyback FXS and distribute to veFXS holders through FXS1559
Yes, extra collateral as in collateral that isn’t rehypothecated.
And this proposal aims to maintain the market operations (farming yield in the pool & re-balancing) as well as FXS1559. But the FXS TWAMM AMO (using minted FRAX during de-collat) will be stronger buy pressure on FXS than the current FXS1559 pressure from FRAX3CRV farming.