Context
Sundae Labs has finished building and auditing a new pool type for the Sundae v3 protocol, following the “Stableswap” paradigm popularized by Curve finance. You can find the implementation here.
These contracts have been audited by TxPipe, and the audit report is available here.
We would like the DAO to approve deployment of this protocol with the parameter choices described below, and the creation of a new incentive program to attract deep stablecoin liquidity.
Rationale
Sundae Labs is seeking the DAOs approval to, in its role as Settings Administrator for the Sundae v3 protocol:
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Update the global settings datum to add the stableswap specific settings to the extensions in the settings datum.
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Set the stableswap fee admin to Sundae Labs
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Set the stableswap minimum protocol fee switch to 0 basis points on both buy and sell orders
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Create an ADA/USDM pair with the following settings:
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5 basis points LP fee for both buy and sell orders
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An initial amplification factor of 500
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Create a new yield incentive program specifically for stableswaps
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For any month in which the above pool has a majority of the USDM/USDA liquidity across any DEX recognized by taptools, the incentive will pay out
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It will pay out ADA equal to 25% of the protocol revenue generated by swaps against the pool above, before calculating other revenue disbursements
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We believe these settings will create a competitive advantage for Sundae, and incentive liquidity providers to consolidate on the USDM/USDA pool.
Proposal
If this temperature check shows sufficient interest, the on-chain governance vote will present the following options:
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Vote STABLESWAP ONLY to deploy the stableswap protocol without the incentive scheme
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Vote YES to deploy the stableswap protocol and the incentive scheme described above
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Vote NO to reject deployment of the stableswap contracts under the Sundae protocol umbrella
Are you interested in voting on an on-chain governance proposal to adopt this incentive mechanism?
- Interested