Kyber gauge on Avalanche (FRAX-USDC) proposal

Governance Proposals Gauges
1

Summary

Add a gauge for FRAX-USDC Avalanche Kyber pool.

Background & Motivation:

KyberSwap (https://kyberswap.com/) is an on-chain PMM DEX and an aggregator with 2 distinctive features: optimal routing (including on-chain arbitrage opportunities) and amplified liquidity (akin to Uniswap v3), available already on Ethereum, Binance Smart Chain, Polygon, Avalanche, Fantom, Cronos, Velas, and Aurora. Kyber is looking to help Frax Finance users to source FRAX for the cheapest price on-chain and offer capital-efficient market making across all chains Kyber is present on.

We’d like to propose to help incentivise and create deep liquidity for the FRAX-USDC Avalanche pair. This pool would have the following benefits:

  • buyers would benefit from low trading fees (starting from 0.02%, dynamically adjusted based on volume)
  • the pool settings proposed below correspond to the 1.0033 FRAX minting bound, enabling LPs to benefit from concentrated liquidity
  • Kyber pool fees compound within the pool
  • Easy integration due to uniform LP tokens
  • 90% of trading fees going to LPs (10% management fee vs Curve’s 50%)
  • Kyber LPs are insured for $20mn by Unslashed

FRAX pool
FRAX pool872×694 37.1 KB

For more information about Kyber: https://docs.kyberswap.com/

1 Like
2

your gonna need a lot of liquidity to avoid FRAX going out of the set range.

you will also need an AMO to help keep peg or are you going to rely on arb traders to do it for you?

3

Liquidity does not impact the range. Should one-sided volume exceed available liquidity, the pool would get depleted on one side and won’t provide any quotes when outside of the bounds.

We expect the arb traders to help maintain the peg. But if the community believes an alternative setup is preferable then we can see what can be done to facilitate.

4

arb traders will only step in if there is profit to be made. why are we not taking advantage of that and making the profit for ourselves?

5

Thanks. Do you suggest to widen the trading range? If so, what do you see as the optimal one?

Our proposal was mostly based off prioritising slippage and is only an initial suggestion.

6

im suggesting that rather then waiting for an arb trader to step in , why dont you become the arb trader that does the arb trading and then use the profit for something rather then just letting other traders walk off with the profit?

7

Sorry, don’t fully see what you mean. Could you please elaborate?

8

an arb trader will only help you keep the peg if they can make a profit.

if there is profit to be made why are we letting some random trader make it , why are we not doing the arb trade and making the money ourselves ?

9

With respect to pools it’s not possible to do right now. But can be an idea for another proposal I guess. If I understood you correctly

10

how can you say its not possible to do when you already said an arb trader can do it?

or maybe an arb trader cant do it and you will lose peg?

11

You’re right, an arb trader can do it. But a pool can’t do it automatically. This is what was meant.

Anyone who wants to do the arb trade is free to do it, but it can’t be built into the pool smart contract at this stage