Due to instability in the USDN peg, this is a proposal to lower the amplification coefficient for a wider capture range. The capture range will be widened to ±1.43%.
Specification:
Set future_A for the USDN pool to 50.
Ramp over 7 days. (Unix timestamp for 14 days after proposal creation)
Are we sure this is necessary? How are you calculating if the peg is being held or not? The USDN pool consistently has high volumes and generates real revenues compared to many pools so I want to make sure this doesn’t affect them negatively.
What is the average trade size in USDN pool right now? Decreasing A will increase slippage on large trades, so if the pool has large trade sizes, volume will be affected in some way.
I don’t see how changing A will affect the peg. Given current pool proportions, decreasing A will put USDN further off peg. Hopefully it would be offset by arbs adding USDN to the pool, but I don’t see how decreasing A is a solution to the peg problem in itself.
The Curve USDN pool is the most liquid place to trade USDN. Currently there is less than 5 bps of additional slippage for a $1m trade, this is way more liquidity than on waves.exchange. While decreasing A will increase slippage on some trades, on other trades slippage may be reduced (if the price drops more).
Yeah true points. Adjusting A doesn’t solve the peg problem by itself. You have to face the realities of the peg. We can’t try increasing A to try to push the price back up. Maybe that works temporarily but you increase tail risks.
And the realities of the USDN peg is that it’s more volatile and can trade in a wider range than the original A accounted for. A should be adjusted lower so that the pool doesn’t sell 3pool reserves too fast.