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

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.

the amount paid to the pool will not change if you change the rewards from 3x to 2x, it just means the way rewards are split for people in the pool will be slightly different.

lets say the pool gets rewarded 5% of the gauge vote, 4375 FXS. and there was only 2 people in the pool and they both invested the same amount of LP’s , one locked for 1 year and one locked for 1 week.

in a 3x pool
1 week = 1093.75
1 year = 3281.25
total = 4375

in a a 2x pool
1 week = 1458.33
1 year = 2916.66
total = 4375

in both cases the protocol pays the same amount of rewards, but the long term investor gets a bigger share of them rewards in the 3x pool than he would in the 2x pool, giving people more reason to lock longer. if everyone in the pool lock for the max then it dont really matter what x the time lock has.

The balance between those who lock and those who do not lock will change. Less will lock, because it is less attractive (2x instead of 3x), meaning more will stay unlocked and we will have net more liquidity in the pool at a cheaper rate.
Because most minting and redeeming of FRAX is done via the Curve pool. Locked FRAX-FXS liquidity is no longer needed to defend the peg, so I do not see why we should over pay for locked FRAX-FXS liquidity.

how will we have more liquidity in the pool is less people lock in the pool .

I mean time locked, less will chose to lock for a year, more will just keep their LP unlocked.

if you want more unlocked liquidity then why have a pool? no pool would result in it all being unlocked and it will be free.

We want liquidity, but we do not want to pay extra to make it time-locked liquidity such that the LP’s can not leave until their lock expires. Most liquidity in DEFI farms are not time-locked and they work fine and are cheaper. We only want to pay extra for time-locked liquidity when it is concentrated liquidity, because that is very efficient in helping us keeping the peg.