CIP#10 - Update y pool A from 2000 to 1000

Proposals
#21

I totally agree with this. The modification of A just makes a chaos in this community. It eventually decreases the trust to Curve Finance. It is dangerous.

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#22

Although I am generally in favor of collaboration with Andre Cronje, I will be voting against this proposal.
Everyone is free to sell their earned CRV but I have no interest in helping make that process easier or in this case safer to do at a large scale. Growth of the yeth vault only pushes CRV price down and brings absolutely no LPs invested in the curve protocol success.
I want distributed CRV to end up in the hands of investors that could decide to hold it if incentivized properly, the vault does not offer that option at all.

#23

I think this topic is quite important and should not be rushed into. There are multiple factors and risks to consider.

I would be in favour of discussing this topic first and then having a vote about potential solutions.

#24

So the high A of y pool, has essentially allowed arbitragers to keep getting DAI for 1, when in fact they should have been paying 1.01 ~ 1.02. So by bringing A lower, it makes DAI more expensive to buy.

This is not correct. Higher A = more liquidity around 1, it doesn’t allow arbitrageurs to get DAI for a lower price, it means that there is not that much liquidity spread a bit further from 1.00 price point. Which is what yearn yETH vault is experiencing not being able to withdraw the DAI it deposited and return the loan if ETH price goes down too fast.

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#26

So it seems pretty clear now that the 2000 A is just too high. The y pool needs to be balanced as much as possible. 2% of the pool in DAI doesn’t cut it.

Can you clarify why the y pool A was raised to 2000 while sUSD is only 100? I think I remember Michael saying something about in the chat awhile back but we need to understand why we’re in this situation now.

Is there any negative side affect Of lowering A that hasn’t been covered here? Perhaps we should go more extreme than the proposed 1000 value, and reduce A to the same as sUSD pool? Thanks

1 Like
#27

I also would like to know the reason.

#28

Loss of virtual profits from this change ended up being -9% annualized. Immediately offset by CRV incentives.

Great that there’s more DAI liquidity, Ypool won’t sell off it’s DAI reserves as fast now.

Though there’s room to lower the A factor more.