[Closed] Re-allocate existing rewards to incentivise Curve mUSD Meta Pool

Summary :

Re-allocate MTA rewards from either mUSD/USDC 50/50 pool or mUSD95/MTA5 pool to Curve mUSD/3Pool

Abstract :

Proposed by harvw after a successful Curve DAO vote adding new mUSD/3pool gauge, and feedback from the community that prior poll to assign rewards to this pool was poorly designed.

Curve Finance has added an mUSD/3pool Meta Pool to their platform that sees equal parts mUSD and 3pool [USDT, USDC, and DAI] deposited with CRV rewards for liquidity providers, which launched 14 October 2020 after a positive Curve DAO vote. This pool is incentivised with CRV through the LiquidityGauge.

This pool will act as a major source of trading volume for mUSD given that it benefits from StableSwap [PDF] design and the existing liquidity in the 3pool.

This discussion is focused on re-allocating the existing 10,000 MTA rewards from either mUSD/USDC 50/50 pool or mUSD95/MTA5 pool (or 5k from each) and re-allocating them to the mUSD/3pool Meta Pool on Curve.

Plan would be to have a brief discussion to decide on parameters for the vote, before opening up on Snapshot on Friday, ending on Sunday

Initial ideas for poll structure: Vote 1: yes / no (with 55% seen as a majority vote), Vote 2: 10k from USDC / 10k from mUSD95 / 5k from each

Motivation :

Over 50% of MTA holders voted in favour of incentivizing the pool in a recent poll. However, it became clear that the ambiguity over where the potential MTA would come from, the poll choices, and other items had a negative impact on many individual’s perceptions of the discussion and poll. In an attempt to address that, the community has identified a source for the MTA that could be allocated to the mUSD/3pool Curve pool that would not result in additional MTA being emitted.

Arguments For :

The Curve AMM is far more efficient than Balancer’s, as identified by angelangel0v.

Curve has allocated CRV rewards to the pool.

Moving MTA from an existing pool avoids further dilution of MTA

Arguments Against :

As we have now identified a specific source for MTA, I don’t believe there are any.

3 Likes

I fully agree with this proposal.
Securing mUSD liquidity is absolutely necessary, and Curve and Uniswap are the best way to achieve this.
increase TVL will encourage the long-term value of the MTA.

If possible, i would like to hear from those who voted for the “0MTA” last time in this Forum.

1 Like

I am also in full agreement with this proposal.

Providing the yes/no vote passes, could we also perhaps consider opening the vote for the allocation of rewards on Monday?

Curve is a critical mUSD liquidity partner and so I think that it’s vital that we try to complete this entire voting process within the next 7 days so as to not lose any more precious momentum.

1 Like

I fully agree with this proposal.

In full agreement here, I look forward to voting on the revised proposal and hearing some rationale from the people who voted no/zero rewards, as I think the benefits to mUSD’s liquidity from being on Curve are too clear to ignore.

I believe the 50/50 pool is very valuable. Curve can be valuable too so I propose a several month timeline (or longer) where both pools are incentivized equally. We need liquidity in both places (and more). Curve is likely to get used more but all pools need a sufficient amount of mUSD to be able to give users low slippage. If we try to bet everything on balancer, curve, or any other pool individually we are massively exposed to the risks and whims of those developers making changes.

It’s true that Curve is much more efficient for stablecoin swaps, but why do we need to take away from the existing earn pools, why not just another 10k MTA going to the new Curve pool?

Some LPs may not want to have funds at risk in Curve and may prefer to receive BAL over CRV! The risk profile is different between the two platforms, so we should take that into account as well.

Something else to keep in mind: the mUSD/USDC pool has doubled in liquidity in the past 3 weeks!

1 Like

Distributing the new 10k MTA is reasonable, but 49.4% voted for the 0 MTA in the last poll.
I don’t know what the outcome would be if we poll yes/no for the new 10kMTA.

Realistically, we think it makes sense to make the proposal in a way that reduces inflation.
I don’t want to give CurveCommunity a bad impression.
Therefore, we would like to see an early response.

…Where are the 0MTA people? :sweat_smile:

  1. mUSD/USDC 50/50 pool
  2. mUSD95/MTA5 pool

I think it’s 2 that hasn’t contributed to the liquidity of mUSD.
I agree with DefiMoon in part.
(However, Uniswap is more strategically important than Balancer)

Meaning new liquidity?
The 50/50 pool helps tremendously to maintain the peg.

Dropping one pool for another is a rash move…it should be another 10k pool.

IDK how to stop the dumpers though…this is a very high price to the early token holders. It’s very hard to acquire enough MTA to compete with them.

The rationale was that the previous vote (https://snapshot.page/#/mstable/proposal/QmS11L5qMfJZ4iRerXYRaVKWVFN4WFRTf368CyAni77X2K) which proposed a new 10k allotment was met with strong opposition (49.4% voting no essentially).

The only piece of information from those no voters was that they wished to avoid additional rewards coming to market. Personally I agree with you and feel that a new 10k amount would be the most optimal strategy… but I created this vote as a way to resolve those concerns.

Possible vote 1 should be ‘should 10k rewards be allocated to Curve’ yes/no. Then ‘where should the rewards come from’ 10k from USDC pool/10k from mUSD95/10k newly assigned.

Agree with @savannah that dropping a pool completely is a rash move. The mUSD95 pool has 25k! rewards so taking 10k from there seems like the logical choice to me if it has to be taken from anywhere

I like this double vote plan…and we can really pull the rewards from any of the pools so that can be decided later if the community wants a curve pool. I think they would.

why not take 10k from the 50/50 MTA/ETH pool?
Making mUSD more attractive to mint/swap to leads to better total ecosystem. The 50/50 MTA/ETH pool @ 25k reward seems a bit high, especially when more adoption for mUSD will come from incentivizing the pools with mUSD and not from incentivizing MTA/ETH

I would like to proceed with this proposal.

& I think the MTA / ETH pool is a necessary one for the price of mta stable.
(but whether the amount of reward is reasonable is debatable.)
However, I’d like to discuss it next time because the discussion is divergent. :smiley:

Agree but I don’t think this pool will be completely dropped. Let’s incentivize the CRV pool first and then make a decision on how to incentivize the other pools further where required.

There doesn’t appear to be any fundamental difference between voting questions being suggested here and the original proposal, and so I’m not really sure what difference it would make.

As a result of the discussions here, new polls have been created and are open now:

Full support for allocating MTA rewards to the Curve metapool!
It is probably best to source these MTA rewards from an incentivized EARN liquidity pool. Additional MTA inflation will not be received well by a community that is bristling at the levels of MTA emission to project investors.

While the proposals have already been submitted, it might be worthwhile to consider the points below regarding the current EARN pools.

  1. 50/50 mUSD/USDC Balancer Pool
    a. Purpose: Additional peg support plus on/offramp for mUSD users
    b. Necessary?: No, the Curve metapool fulfills both these purposes more effectively

  2. 95/5 mUSD/MTA Balancer Pool
    a. Purpose: Promote mUSD minting and holding outside of SAVE and provide buying/holding pressure for MTA
    b. Necessary?: Yes, both goals currently required for protocol success

Further, please consider two possible outcomes from a reduction in these respective EARN pools.

  • 50/50 mUSD/USDC pool rewards reduced by 10K MTA/week > users shift liquidity to the 95/5 mUSD/MTA pool which promotes mUSD more and results in MTA buys

  • 95/5 mUSD/MTA pool rewards reduced by 10K MTA/week > users shift liquidity to the 50/50 mUSD/USDC pool which promotes mUSD less and results in MTA sells

That being said, the 95/5 mUSD/MTA pool currently receives 25K MTA/week and can thus absorb a 10K MTA/week reduction while the 50/50 mUSD/USDC pool receives only 10K MTA/week. So it makes sense sourcing MTA rewards from the 95/5 mUSD/MTA pool.

2 Likes

That being said, the 95/5 mUSD/MTA pool currently receives 25K MTA/week and can thus absorb a 10K MTA/week reduction

Yes, this was our ultimate rationale for trying to keep the poll as simple as possible and sticking with two options for those supporting allocating 10K MTA to the Curve pool. We went back and forth for several minutes trying to decide this, and figured a cut and dry poll would be best considering how low the rewards are for the 50/50 pool now and how much liquidity is there.

Thanks for the thoughtful feedback, as always! You’re a super valuable member of the community. :slight_smile:

1 Like

A Snapshot poll lead to the community voting in favour of re-allocating 10K MTA per week from the MTA 5/mUSD 95 EARN pool to Curve’s mUSD/3pool Metapool.

  1. https://snapshot.page/#/mstable/proposal/QmS11L5qMfJZ4iRerXYRaVKWVFN4WFRTf368CyAni77X2K
  2. https://snapshot.page/#/mstable/proposal/QmVVKKG9jAr2t5yAXhMPFEWWNhCGEFVTkgYWesPFMvxHqf