A proposal for sunseting 180 days long-term farm of saving pools

Ideas
#1

At the beginning，There is a bailout feature for uUSD minting engine, a stable and deep TVL uUSD saving pool is needed and very importmant for peg. But later, because the uUSD minting engine with USDT as collateral released, the bailout feature offline at last. And later the saving pool locking changed to 180 days long-term farm mechanism.
Now I think this 180 days long-term farm mechanism of Saving pool is unnecessary,it even hurts the liquidity and the peg. Suggest to sunset the mechanism. The 180-day long-term farming mechanism is a very good mechanism, but it does not need to be deployed everywhere.

  1. Compared to CFMM pools and unified staking pools, Youves platform have no needs about long-term and stable requirement for savings pools.
  2. Based on the same amount of incentive rewards, TVL of savings absorbed by long-term farming is much less than that of the flexible farming.The efficiency of incentive rewards for flexible farming will be much higher.
  3. The funds in the savings pool can help with pegging, and if the funds in the savings pool are flexible, it will be more beneficial to help the pegging under the drive of interest rate changes. In the long-term farm people prefer to stay even when the ecosystem need them to do so.
  4. Considering all the implications and factors, it is recommended to start with changes to the uXTZ savings pool first. I predict that the APR of savings pool will drop to within 10%, which means that the TVL can at least double.
2 Likes
#2

I do agree that 180 days lock on savings can disincentivize the productive use of the tokens in the savings pool. But i don’t think moving in and out of the savings pool should be totally free. I like the idea of maintaining the 0.5% deposit fee but experimenting with sunsetting the locking period. I think this might be a good balance between adding flexibility to the savings pools but also providing some added incentive to users who just want to save.

3 Likes
#3

Thanks for your reply. I think that any thresholds set by humans will only reduce the flow of funds and lower the efficiency of rewards. This is inconsistent with our goals. Also, even if depositors receive 0.5% savings fee income, this income is not well reflected in the APR display and belongs to invisible income, which has no positive effect.

#4

What if instead of directly “uXXX” tokens we pay the savings rate to the main stable curve? So i.e. pay to uusd<>USDT uusd instead of incentivizing with YOU.

#5

I think this is good idea. In fact, interest income can be distributed to these two pools according to a certain ratio. Of course, the premise is to sunset the long-term farm mechanism in the savings pool. At present, both pools are the same for users because there is no impermanent loss.

#6

If we remove the 180 days linear reward distribution. Why should you receive any reward?

It’s very important to note, already today there is NO LOCKUPS. Users can get in and out at any time already today…

I think that the rewards paid on to the LP token is probably addressing the issue we have better.

#7

I know there is NO LOCKUPS…
You mean all interest income distributed to the LP pool? If so, there will be no savings pool in the future?
Now let me explain why a flexible savings pool is necessary. First of all, when a user gets uassets, we want him to either use it or hold onto it until the next time need to use it., rather than sell it. However, in reality, if a user receives uassets and is not prepared to participate in farming, they are likely to sell it. The current savings pool mechanism means that when making a savings decision, users give up because they cannot ensure that funds are saved for 180 days. The 180-day savings mechanism makes early withdrawal a loss feeling rather than a gain feeling for users. However, if we provide a flexible savings pool, even if the APR is not high, it will encourage users to hold onto uassets.
The most representative one is the uXTZ savings pool. When the APR of the savings pool is slightly higher than the baking yield of XTZ, users tend to keep uXTZ instead of exchanging it for XTZ immediately. At the same time, the gaming behavior among users will also prevent the APR of the savings pool from being particularly high or lower than the baking yield of XTZ.

#8

I think it’s important to specify what we are trying to solve or optimize? Is it long term liquidity?

Already today there is no lock up so people are free to change their position when they feel like it.