[Proposal] Pause USD burn/SHARE inflation

Hi Everyone,

@Sebastien has mentioned this as well and I wanted to open discussion on whether this is a good idea in the current situation. There doesn’t seem to be enough USD in the USD/SHARE pool for us to get back to peg without new USD demand or another currency getting involved so it may be a good idea to pause SHARE dilution until a new solution can be found.


The protocol is supposed to work as such durning neg rebases

burn usd, get cheap share, use cheap share to buy usd

problem is there is nothing stopping people from burning usd, get cheap share, dumping share for ETH or anything else

Fix that problem first before we go mucking around with the protocol. Its not even being used as intended currently.

On the burn page of the dollarprotocol website there should be a button that does the above automatically. ie if you burn share for cheap usd, the process will also go and buy the usb back for you.

The burn program should be updated to do this.

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It’s not really working fast, but it’s still important as it drives front running with people buying USD. No one will buy USD if you remove the mechanism that push USD to $1.

i dont see it working at all.

anyone can buy USD with ETH before rebase
then after rebase burn USD get SHARE
then dump those SHARE to get more USD
then dump USD to get more ETH.

i dont think it helps anyway the price of USD or SHARE.

so this strategy is not going to help at all. that is why stopping is really required.

the arbitrage needs to go to share holders as @Sebastien has said. that way it stays within the project. now it can go anywhere which does not help the cause.

anyone advocating that burning USD and SHARE dilution is helping push USD needs to show some data about price changes before and after rebase to prove his point. i did not see much changes to price. so this thing needs to be stopped and try to make it better.

That moves USD from the SHARE-USD LP to the USD-ETH LP mainly. Not sure it helps at all as USD in the SHARE-USD LP are from @Robert so mainly outside of the circulating supply. I wonder if we are not removing X USD then adding back 1.1xX USD back. The SHARE-ETH LP is too thin to be used.

I still have the intuition that it helps somewhat the price.

But that the kind of research that should be done.

it is a problem that the current system is removing usd from the usd-share pool which is most important to fixing the peg, otherwise lack of liquidity will make this too inefficient/slow to arb.

There does need to be an incentive to providing liquidity to usd-shares. The current system relies more on a single-sided AMM solution.