FIP 98 - Arable arUSD Stability Fund Gauge

Governance Proposals Gauges
1

Summary

Add the Arable arUSD Stability Fund to the Gauge System

Background and Motivation

Benefits for FRAX Holders

  1. ACRE airdrop to everyone who participates in the voting process upon successful passing of the proposal as a good-faith partnership action.
  2. ACRE rewards for participants in the Arable arUSD Stability Fund.
  3. This partnership between Arable and the FRAX community will lead to increased visibility of each other’s communities.

The Protocol

Arable Protocol is a DeFi platform that focuses on synthetic farming and trading. Our objective is to make multi-chain farming accessible, affordable, and simple for everyone. Both seasoned and novice farmers can easily stake yield farms from various chains thanks to a user interface that is straightforward but effective. Arable Protocol is based around a synthetic ecosystem and its liquidity is created through the minting of the stable asset arUSD. Users can exchange between different LP tokens and synthetic cryptocurrencies using arUSD, and they can farm on synthetic yield farms that follow the APR of their native chain counterparts.

The Stability Fund

The Arable arUSD Stability Fund is a multi-token contract that allows swapping between multiple stable assets, including arUSD, FRAX, and other stablecoins like USDT and USDC. All participants in the Arable arUSD Stability Fund earn extra ACRE rewards as an incentive.

The Stability Fund is an unbalanced pool, meaning you do not need to deposit a combination of tokens of equal value as is common with Uniswap-style contracts. Any desired amount of a supported stablecoin can be deposited on its own.

During the arUSD Stability Pool’s operation, users will be able to swap between any stablecoins at a fixed ratio of 1:1 without any slippage. If at any time a side of the pool runs out of liquidity, only swaps into a stablecoin where liquidity is available are possible.

The arUSD stability pool will only be in operation for a limited time during the early launch phase of Arable MVP. Once the protocol reaches one million minted arUSD, public pools will go live on 3rd party DEXs. The arUSD stability pool contract will be used as a stability fund once the public pools are up and running to keep the price of the arUSD and the USD on parity and to buffer large buy and sell operations in the early phase of the protocol.

We propose to add the Arable arUSD Stability Fund, which includes FRAX, arUSD as well as other stablecoins like USDT, USDC and YUSD, to the Gauge System.

PROPOSAL

For: Add the Arable arUSD Stability Fund to the Gauge System

Against: Do nothing

2 Likes
2

This proposal is up for voting here: Snapshot

2 Likes
3

Great professional promising project. The project was executed in a very manner and had a clear development plan. Without a doubt ,this is one of the best projects out there, success always.

1 Like
7

Will be voting against this.

First off, a 1:1 fixed pool is not a good choice for a pool. For whatever reason, people have tried this multiple times even though the logic of the pool is fundamentally broken.

Secondly, this is asking for FXS in exchange for a pool that increases Frax liquidity but there’s no way to tell how much liquidity would be gained since the pool mechanics have no rules on balance and depth.

We have launched this whole system where Frax can help other protocols grow their liquidity by becoming a Curve metapool with the Frax/Usdc pool (Frax Base Pool).

If you want the Frax ecosystem to help arUSD with liquidity, then please make a metapool on Curve.

1 Like
8

I agree with C2tP here, 1-1 fixed pools will generally only hold the worst pegged stables in the set.
I assume that the arUSD Stability Fund will be on Avalanche where we do not yet have a FRAXBP, so doing an arUSD/FRAX/USDC Curve pool there would create better liquidity for both Arable and FRAX.

2 Likes
9

i still see no use case for arUSD and see no reason to create another stable coin when you can just use one thats already created and has deep liquidity.