Whitelisted LP USDx - USDC

It’s clear that there’s not enough demand for USDx. When this happens supply must decrease but it’s not.

Another factor that is not helping is because USDx has lost peg, the rebases are not being called as the reward is insufficient to cover the cost of calling rebase.

While the community had good intentions to reduce IL during negative cycles, ultimately I think the proof is in the pudding and whitelisting the LP is doing more bad than good.

For all LPs worried about IL, the practical suggestion is to remove liquidity and place your USDx into xBond. The 1-1 redemption is going live so you don’t lose anything. Also LPing USDx during negative rebases doesn’t really earn any rewards so not sure why the self preservation unless it’s a sunk cost fallacy.

Ultimately there are 2 options from here

1: continue this debase whitelist LP experiment and see how far it goes (sincerely doubt a repeg without external deflation)

Or

2: enable debase on the LP and have all LPs remove liquidity and xBond for a 1-1 redemption at a later date.

Snapshot vote: Snapshot

3 Likes

agree ppl need to learn what is rebase and debase which is keep DP alive

The whitelisting of USDx-USDC pool was never intended to be permanent, as discussed previously. But I disagree removing it before giving something back to the LPers that support the project.

  • Whitelist shouldn’t be removed until time weighted rewards are implemented.
  • Not before CNYx initial distribution either, if USDx-USDC LPers are included.

To regain beg it’s roughly $60k.

If it’s a snapshot implementation I would suggest to wait until CNYx launch to implement the governance alpha.

I agree with Robert but also with Pixtfuz.
Supply simply has to adjust with the demand.
At the same time a lot of those who stayed in their LP and already lost a lot of their stake will probably be upset with this decision.
So I would also be in favour of these 2 steps Pixtfuz is proposing to reward those who hold strong…

Hard to argue with Robert’s logic. But Pixtfuz is also making sense. Need to think carefully to create incentives for long-term building, staking, LPing etc. and disincentives for dumping.

Additional questions:

  1. Have we given it enough time? The macro environment being what it is right now (seingiorage down, large caps & mid caps mooning), might that not be a factor in weak USDx demand?
  2. Do enough people know about this project?
  3. Boost from the new roll-outs?

We can definitely wait - in the past 3 days though the peg has lost another 100% - 60 cents down to 30 cents. The core team has been opposed to whitelisting the LP from the beginning. If you care, please vote

Thanks for the reply. I voted to take the medicine. We need to fix this thing.

Sorry, but you need a big stable LP. Otherwise your stable coin is dead already. Who is gonna sell his BTC for an illiquid usd coin?? No-one! These are the users you need to grow… The LP should act as a safe haven, otherwise no-one will provide liquidity. So to whitelist it, was one the good things to do.

The reason we lost peg is because people are leaving the pool and there is no liquidity. A few bucks can move the price then significantly. In this case downwards, but it could be upwards just as easy.

Lowering the supply by debasing does not automatically mean higher prices…you lose trust…and then people keep selling (happening now).
For reaching peg, you need trust in the first place!

What I would suggest is to try to get everyone in the LP and then do something with these LP-tokens.
Whitelist the LP (or maybe only whitelist when you lockup your LP-tokens for some time)
Keep xBond, but you can only mint them with LP-tokens
And of course highest rewards to LP

Bottom line, if you want protection or rewards, you have to provide liquidity.
High liquidity attracts REAL users