FIP 79 - Unlock+Move FRAX-FXS LP to gauges

If this proposal passes i predict a large % of the current pool will re-deploy there assets in to other parts of the ecosystem rather then to the new pool.

The new pool is likely to get some gauge votes from the OG members but there is going to be no incentives to vote coming from bribes and the APR is likely to be to a lot lower then its current level.

As an investor in this pool i dont object to the pool being moved.

The current pool is no longer offering good value to the protocol and the protocol does not need a pool of this size to carry out its daily operations, so stopping the rewards would benefit the protocol overall.

I dont agree with this maths, yes the rate of emissions would slow down by around 30% when compared to the current rate of FXS emissions (including rewards and advisor emissions) , but the total amount of coins does not change. To make FXS 40% more scarce we would need to remove 40% of the total supply.

I dont really see much value in spending the time to give this pool voting power at this stage. The protocol has moved on and now has a dedicated pool thats main reward is its voting power. But this will give people 1 less reason to stake in the new pool.

The timing of this proposal does seem odd tho, why would you want to remove a big chunk of the liquidity just before starting a buyback ?

I completely agree with this proposal and I believe the almost halving (40%) of FXS emissions will significantly impact the FXS price upwards in anticipation of the scheduled halving in December.

2 halvings in one year. FXS holders can absorb the 20m of unlocks.

1 Like

ppl already $FXS selling.
FRAX-FXS LP locking in UNI V2 is different to it in Fraxswap under gauge system. I can see some big impact to whole frax protocol, are you sure it is the best time to do this at under current market uncertainty time? (personally I don’t think the market is bottom yet). Also Fraxswap needs more battle testing.
What about start to move some other LPs from UNI 2/3 to FraxSwap and wait until the market to settle down?
Another thing is many early supports to support Frax last year when all frax’ clones were bank-run, by locking FFRAX-FXS to bet Frax will be fine and they could have huge rewards. But to return emission back to the protocol without any compensation, if there were another storm came out in future, who would bet with frax again ?

Why assume OG members will give some gauge votes to this new pool? More likely they could leave frax

i dont think thats more likely.

the biggest investors in that pool are team members and FRAX advisors, and i dont see them leaving any time soon.

1 Like

I agree with moving the UniV2 FXS-Frax liquidity over to Fraxswap from UNI, this seems like a no-brainer to me.

I am still hesitant about rewarding this pool with emissions-based rewards from the gauge rather than protocol profit-based rewards that currently only go to veFXS holders.

This was tangentially discussed in this thread: Switching from veFXS to ve(FXS-FRAX LP) but in summary, FXS-Frax liquidity is some of the most valuable LP for the protocol to have locked since it dampens the FXS volatility and locks more Frax away from circulation, both of which are valuable for the protocol Frax.

If we’re already unlocking the FXS-Frax liquidity (which is introducing a lot of risk, even if it is quantifiable in some respects), I’d rather see it get added to the veFXS pool and be rewarded from protocol profit rather than emissions. For more on how this could work check out the other thread.

Since this LP is so important to Frax, we really need to work to ensure it doesn’t get siphoned away, and this proposal as-is would probably see a drastic drop in the amount of locked FXS-Frax liquidity. Yes, lots of this LP is coming from some of the earliest, most fraximalist investers (like me!) but ultimately what they will see is an up to 40% APY drop to something much less. The biggest gauge option right now receives about 25% of the FXS rewards, so ~3000 FXS daily, even if the whales of FXS-Frax LP go all in on it’s gauge it’s unlikely to capture anything close to the 67% of the gauge that would match the previous APY and LPs will be less likely to lock into something new with a lower rate and no other change.

Contrast this to adding this FXS-Frax LP to the veFXS pool where it would receive less APY but have voting rights, and profit-based instead of emissions-based yield that will remain somewhat consistent instead of halving multiple times over the potential new 4yr lock and personally, I’d be more willing to stomach the change instead of leaving when it unlocks.

Maybe there’s a better way to incentivize FXS-Frax LP than this but I just want to stress that it’s very important and valuable to the protocol in ways that some of our other locked liquidity cough veFXS cough is not. It’s important that whatever we do it is incentivized to stay.

I want to preemptively say I’m not just cheerleading FXS-Frax because I’m a bagholder but because I think it has a uniquely strong value proposition that is explained more in depth in the other thread Switching from veFXS to ve(FXS-FRAX LP)

1 Like

No, you should not stir the old whales.
Long locking Frax-FXS LPs are very crucial stabilizers for the whole system. They are also the most hardcore supportors of Frax from the beginning. They deserve some little fishes(FXS).
Furthermore, moving LP could easily trigger unexpected death-spiral. We should not change the rules and equilibrium point frequently.

I doubt there will be any death-spiral as Frax protocol is based on AMOs today. But ppl might be question could Frax protocol keep its promise.
Also because of halfing at Nov, just 5 months time, FXS scarce will be 20% if not 40% without doing anything.

1 Like

A stable deep Frax-FXS pool is very important for FXS price.

If Frax-FXS lp get removed for seconds, bad attackers will easily hurt FXS price that will hurt the confidence of Frax protocol, the APY of all pools will drop, paperhands will leave and avalanche will kick off.

Please think carefully before that.

The FRAX - FXS pool is rarely used by the protocol since the buyback / recollateralize functions where adjusted so the AMO’s take up the slack.

The OG pool members are the most hardcore supporters of the protocol and we are the ones who are supporting this proposal. The same way the OG investors ended the first ETH pool and the first USDC pool and many other pools over the last 18 months . again ending pools that no longer offer value to the protocol.

OG investors also voted to reduce emissions a few times in the past and can see the advantage to lower emissions. in the past lowering emissions leads to increased FXS price and if an OG investor expects FXS to go up he is likely to use the FRAX (that just unlocked) to buy more FXS, not sell it

I Approve of this proposal
as an original OG (presale+early locker)

at the protocol level, it indeed doesn’t make much sense that this pool takes up most of the rewards
while most of the trading happens at other pairs (fxs/weth) and on cex (binance/ftx)

I also see zero possibility for any kind of death spiral or malfunctions
I don’t know why anyone would be scared of that
it’s not like all the market LIQ is in this pool, there’s like 20m across other pools
and then there’s the cex’s markets

also fxs crashing doesnt impact the stability of frax
it makes it that if someone were to redeem frax at that exact time, they get more fxs
but as the Oracle would not update this in this real time speed
it would be hard to do that plus of course we would have people defending the price (even the protocol itself with the buyback funds)

in any case
frax should unlock this pool
enable the fraxswap pool right away
put it on gauge right away
and put out a bribe right away for first 2 weeks to get some apy going

2 Likes

and then let the free market do it’s thing

Maybe even make an proposal every now and then for
if frax should put up a new bribe

im just excited to eventually move everythings to gauges!

i think this is no longer an option because of FIP 58, Snapshot that passed a few months ago.

oh true

forgot about that

even beter then !

Just curious where would be the Frax part of the increased liquidity from?

Why is the amended and put up for vote with a 1 year lock and zero discussion?

i may be fore this , i may be against this … i dont know?

but i am against the idea of changing a proposal and then putting up for a vote without adding extra time for discussion about the changes.

maybe we could extend the voting time by a few days on the current vote so people can have time to review the amended changes.

I fully support reducing emissions and incentivising liquidity to move to Fraxswap.

I want to point out though that the FRAX/FXS Uni v2 pool still makes up a large portion of the trade volume for FXS Uniswap Info.

I would be more comfortable supporting this proposal, if the FRAX/FXS Fraxswap gauge would be live at least one full Gauge Voting Cycle (7-13 days) before the unlock. This should give confidence to users for which the LP unlocked to re-stake them on Fraxswap.

There already is a decent amount of FXS-FRAX liquidity in Fraxswap 11M vs 57M in Uniswap. I didn’t run any numbers, but seeing this number go up before the unlock would boost confidence even more.

When Frax launched there were some short term boosts (3 days?) for the main LP pairs to encourage users to stake asap. Maybe something similar can be done here, for example providing a 1 or 2 week boost (e.g 2x) when the FXS-FRAX Uni v2 LP unlocks.

Note that my ideas are based on the assumption that is important to Frax to increase the FXS-FRAX liquidity from users. If this is not important because Frax will grow it’s owned liquidity for that pool (POL), then effort/resources is better spent elsewhere.

I think a 1 year lock with a 2x boost is better than the 1 year lock/3x boost. 2x will be enough to persuade lockers to do a 1 year lock, so we will get more lockers while paying less.