Hi everyone - long time supporter, first time topic creator/proposal suggestion.
I recently learned that the folks at Vesta Finance have decided to unwind the project, cash in their VSTA tokens, and stop minting new VST tokens. With that in mind I propose we should unlock the Curve LP tokens locked in the internal pool with Frax Finance so anyone in this pool can unwind their positions. I would also recommend we remove this gauge given the protocol is unwinding.
Hey @0xChuckbeard , thanks for bringing this up! Given the situation with Vesta Finance, your suggestion makes a lot of sense. I encourage you to apply for a ‘ragequit’ function with a standard 20% fee for the VSTFRAX pool. It’s important to note that based on the Vesta Finance proposal, there will be an unlimited redemption period during which all circulating VSTA (including vested VSTA) can be exchanged for a pro-rata share of the Vesta Finance treasury, corresponding to the VSTA book value. These funds will be distributed in USDC and ARB. Given this setup, there’s no risk of losing funds.
You can use the following example proposal as a template:
Lastly, I want to emphasize that while the proposed 20% withdrawal fee follows our standard practice for similar cases (mUSD and the L2D4 gauge) still, it’s open to discussion and adjustment based on the specific circumstances.
Hi Amir, the redemption is for VSTA the governance token, not the stablecoin. The stablecoin is going to enter full redemption (where anyone’s VST position could be closed by an third party) in as short as three months. 20% is quite high - a retrospective analysis put the average reward at 7% which I believe would also be a good number for this withdrawal fee setting.
In addition, a common argument I see on the Frax Telegram chat is that the early unlockers should pay for their future reward. This way of calculating the withdrawal fee is a bit flawed in the sense that the reward will continue to be rolled out once your vote moves to a new gauge, which people can move to and lock again. Asking for a high withdrawal fee will discourage people from locking in new gauges in the future.
Thanks for your message. It would be great if you could draft the proposal with 7% or any other amount that you think is reasonable (along with your calculations and reasoning) and post it in our Governance Forum. And then we can go for Snapshot Vote.