Summary:
Lower A factor of pETH/ETH pool from 10->6
Abstract:
To incentivize the long-term balance of the pETH/ETH pool closer to 50:50, JPEG’d is requesting lowering the A factor from 10->6
Motivation:
To incentivize the long-term balance of the pETH/ETH pool closer to 50:50, JPEG’d is requesting lowering the A factor from 10->6
Specification:
Lower the A parameter from 10 → 6 on pETH/ETH pool
https://curve.fi/#/ethereum/pools/factory-v2-194/deposit
For:
Lowering A will incentivize the long-term balance of the pETH/ETH pool closer to 50:50
Against:
Do not lower the A parameter of the pETH/ETH pool (do nothing)
Poll:
Post a link to your proposal if it’s already been created
This proposal carries little risk and would plausibly help to maintain pool balance near 50:50.
As we’ve seen in the past, the value of ETH (and other) derivatives often fluctuate during market turmoil or other unfavorable conditions. Since the float for pETH is currently on the smaller side, lowering the A value can protect LPs from major imbalances during any such price volatility.
The primary risk of lowering A is that the pool’s value-at-balance (D) decreases if A is reduced while the pool is imbalanced. Since the pETH/ETH pool is relatively balanced (ETH: 55%, pETH: 45%), this is not a major concern.
If A were to instantaneously change to 6, D would only be reduced by .07%. Since, in practice, A is shifted gradually over time, the losses are typically less.
% change in D as a function of A value is shown here:
