Due to the current circumstances, i.e., UST trading 90% off-peg and Terra ecosystem having approx. $9B in bad debts, there is currently no prospect of a sustainable recovery of the peg. Furthermore it is yet unclear as to how exactly weaknesses were exploited and if these vulnerability vectors will persist even in the case of a successful bailout. Meanwhile, the possibility of pools receiving CRV emissions creates two problems.
1.) Pools could be bribed solely with the intent of attracting exit liquidity for UST > Soft-rugging new LPs
2.) Empty pools could be occupied by entities seeking to extract value from the Curve DAO through CRV emissions. By constantly voting or bribing for the pool, the LP would only farm CRV and not provide any value to the DAO in the form of liquidity and volume. Under normal circumstances this wouldn’t be an issue as other LPs would deposit liquidity and dilute the CRV emissions. However, because UST trades off-peg, this would allow the “malicious entity” to deposit liquidity with an uneven distribution. This would prevent other LPs from entering the pool due to high slippage and/or provision of (UST) exit liquidity for the “malicious entity”.
For the reasons above, we don’t think UST pools should be incentivized by CRV anymore as it would create a negative loop for CRV.
List of pools & gauges
Remove all UST pool gauges
- Not all gauges (specify below)
(Vote below only if you selected the third option - Max 10/11 votes)
- Wormhole v2 UST-3Pool
- Mainnet MIM-UST
- Mainnet 4pool
- Mainnet UST+3Crv
- Arbitrum 4pool
- Avalanche 4pool
- Avalanche 3pool UST+USDC+USDt
- Avalanche USDC.e-UST
- Fantom 4pool
- Fantom UST-3pool
- Optimism 4pool