People could swap alUSD for DAI and provide to any gauge and double dip just as much. So long as you can borrow against a curve position you can leverage farm.
It wont be long until you can borrow against convex positions. This proposal does not accomplish anything regarding double dipping because the same amount of CRV rewards are released, and it doesn’t matter which pool is getting them as debt can be converted into any qualifying pools assets.
Who came out with this dumb idea? This is a bad precedence to set and was how TradFi failed in the first place. Can’t believe this actually made it to the proposal board.
This is literally the purpose of proposal boards. No one gets to decide “this is a dumb idea, no vote for you!” If it’s a bad decision, then it is brought to light and we all benefit since we can all understand why it’s bad. And vice versa.
My faith in humanity has dropped slightly today just due to the number of people that are incensed that this is even up for discussion. This is literally the point of having governance set up this way.
people would buy alUSD w/DAI to redeem in transmuter 1:1 or repay debt
people would buy DAI w/ alUSD to double dip farm curve (oh noes spooky).
If I can trade alUSD, then I can trade alUSD to an asset I can deposit in Curve. alUSD doesn’t even farm curve under the hood, the staked DAI in alchemix does. So I can stake DAI in Alchemix, earn from Curve. Borrow alUSD and trade for DAI, then stake that in a gauge.
Now, without holding any alUSD I’m double dipping CRV rewards. This proposal does nothing to dissuade that.
What I’m saying, if there are no gauge CRV rewards on alUSD pool, then who will deposit DAI there to let you buy DAI w/ alUSD? Only those who will dump ALCX immediately.
I’d disagree because there is a guaranteed buyer 1:1 in the transmuter.
Any alUSD bought under $1 can be pretty instantly realized as profitable even without holding debt in the system.
And liquidity can be incentivized elsewhere as we are seeing with Saddle.
So lets take this Saddle example.
No liquidity on Curve, no gauge on Curve, liquidity will exist, users will be able to swap for alETH on saddle to ETH and then farm that ETH on Curve.
Are you saying you expect that no liquidity would form on any market under any circumstance for Alchemix products? If no, then there will be a way to double dip.
I think here we should also calculate how much Alchemix or Abracadabra are actually incentivizing the 3pool part bringing new capital to Curve. There are other pools who have no double rewards and are 100% incentivized by Curve exclusively. I’ll try to work on some numbers here to have a better picture on each individual pool.
Then he will farm not in isolated Alchemix pool, but in some pool where big veCRV boys are farming, and then he will need to lock some portion of veCRV for boost and good returns, like Yearn is doing.
Like they have to do to farm the alUSD pool currently, but just different, because alusd is a token which must not be listed?
Get veCRV to vote for returns and lock up some portion to vote for boost like yearn is currently doing with alUSD?
But not alusd, because reasons.
The reason stated is stopping double dipping, we have proven that’s not prevented, so other unstated reasons. Perhaps reasons without good justification.
(I cannot stress enough but by design alUSD is not a double dipping token. Its the vault that earns not the debt token. So there is likely many alUSD liquidity providers not double dipping at all. Only alUSD LPs with a corresponding vault are double dipping, and can do so in any pool, not just alUSD)
That’s besides the point. The point being that alUSD can be used to leverage farm CRV even if alUSD/3pool is not incentivized. In fact, alUSD holders are free to use yearn to farm pools with a Volume/CRV-rewards ratio worse than that of alUSD/3pool. Banning CRV rewards to alUSD/3pool fixes nothing.
Every $ in Curve earns its fair share of CRV, as determined by the gauge weighting for the week. Leveraging is fair game. I’d only support limiting leveraged farming if it presented some systemic risk. CRV number maybe go down doesn’t constitute a systemic risk to me.
We know leveraged farming is a thing, it’s been discussed in other contexts (ie. 3CRV gauge token collateral on Unit) as a positive feature. The decision to punish specific leveraged farming strategies seems misguided to me. The longevity of the Yearn-style CRV harvesting depends on the asset continuing to have a healthy trajectory. CRV dumping at the protocol level isn’t new, and it isn’t necessarily the bogeyman some people make it out to be. Obviously Yearn has a long term stake in Curve, and they support us with CRV locking and ecosystem development. IOW, generous CRV distribution, even when it is used for dumping, has a way of further cementing Curve as the dominant AMM. We are getting the world addicted to our yield, and we should continue aggressively.
I believe alUSD should keep its gauge. I also believe we must put an alETH gauge to a vote.
What is really cementing Curve is when liquidity provider become veCRV locker. There are plenty of stable pools here who’s LPs veCRV power is very high.
CRV rewards are not forever I mean inflation will drop hard next years. So why do you think your yield addicted coins will keep perform on Curve?
Truth is that all these alUSD and MIM, etc. are about zero add-value Defi projects and long run they offer nothing real on top of Yearn, Convex and Curve.
Exactly. To serve a level playing field as an infrastructural AMM protocol, we should be governing based on principles, not on a specific project / team.
In this case, we should be discussing the removal of gauges for leveraged farming / synthetic pools, instead of the removal of alUSD gauge.
I personally don’t think we would like to go down that road.