And it would have.
It would not have. We’ve had plenty of tokens that even with a gauge failed to maintain the peg. See USDP which had to shut down.
USDM has several directions.
- minted and sold.
- bought and repaid
- LP to speculate on neutral flow
Since Mochi team holds nearly all the Mochi, they own nearly all the CVX purchased.
They have no incentive to distribute ownership of that CVX, and at this point have made no moves to create their own staking contract to distribute ownership. No ownership distribution has been mentioned by the team.
Here’s a thought experiment for you, you hold USDM.
Which is a Mochi product.
You provide liquidity.
The team trades through the pool USDM > 3pool to access CVX.
Do you think Mochi will be repaying that loan? They did lock their purchase for 16 weeks, so at minimum not for 4 months.
If you think they wont sell the CVX to pay back the debt, then you think they’ll keep voting on incentives, which means no flow back to repay which means LPs will be stuck in USDM without opening their own USDM vault. (And having more value stuck behind USDM)
If they will sell the CVX to pay back the debt then you don’t think incentives will stay on the pool anyway, which means they still wont have a good peg by your standards.
The magic trick here was doing it slow. It was noticed early and able to be shut down but lets say it didnt. End result is even more locked CVX bought through the pool with no reverse flow. Is that good for LPs to be supporting an even larger one way flow when speculating on neutral flow?
If all the flow is just playing the farming game, we’ve seen pegs like this fail such as yveBoost which was a one way flow.
The speed cut off the problem faster. You’d be in the same boat, but Mochi team would be a lot personally richer had the behavior been allowed to continue. Its the natural end.
If Mochi team would sell the CVX and repay their loan, you’d likely be in pretty good shape, but they have expressed no interest in doing so.
The best bet of LPs in my frank opinion is petitioning for Mochi to sell the CVX for USDM in 16 weeks and repay their debt (or hold doesn’t matter at that point) This would put the pool back in balance and can be done without Curve’s involvement at all.
If not that, next best is to have them incentivize liquidity with their governance token to distrubte ownership of the CVX purchased.
Else if Curve incentivizes we’ll just create a scenario where more folks like you are trapped against the one way flow of the team. Its the natural end of such a flow.
But the most important issue at hand here isn’t LPs. This is a governance attack first and foremost, and Curve DAO is incentivized to protect the DAO above all else.
LPs of Mochi’s products can be made whole by Mochi if they choose to. No one can force Mochi to act with decency. Ball is in their court.