Opening up to other AMM's

Approving the use of other AMM’s for liquidity.

Currently we are using only Sushiswap for liquidity in minting our nests, This in itself is not an issue however coupled with the fact that we are the only one supplying and making a market for the liquidity for some of our synths to mint with is. For example, for nSTBL we currently make up all of the liquidity for RAI on Sushiswap, a majority of it coming from nDEFI-RAI.

By starting with and using the DEX aggregators 1inch, we will be able to optimize our sources of liquidity and save on costs per mint by ensuring we have the best deals on Polygon for our underlying assets and in the case of RAI be able to capture more of it as it enters Polygon no matter what AMM it is, as it is a scarce token on this network. Also, this would benefit Polly in the long term because we wouldn’t be obligated to always create a market on Sushiswap for them.

The proposal will lead to the Smart Contract galaxy writing a different strategy of the nest to rely on 1inch to acquire the underlying assets instead of Sushiswap.

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Of course any extra details, ideas or anything else anyone can think of or even think are related should be added to this please comment and I’ll edit this to reflect that on the concept.

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Thanks for putting this together. I’m not sure which concept would work best (will leave that to the big Bao brains) but as a user, I support whatever is necessary to make the cost of minting 1 nSTBL as close to $1 as possible. Otherwise, I don’t see the TVL growing much. The current rate of 1.0518 is far too rich.

I like concept 1.
The nDEFI-RAI liquidity really isn’t needed, as no one is going to naturally use that pool.

I’m not sure what our target liquidity for RAI-ETH should be. But it might be good to first redistribute rewards and then see if, and how much, liquidity needs to be provided by the treasury.

An option is to reduce RAI weight. It is currently 33% or so of the basket. With RAI around 10%-15% of nStable assets, the slippage could be easier to handle.

More liquid alternatives on Polygon include FRAX and MAI. I ran FYI a proposal suggestion yesterday to include the later. I think our two suggestions are related!

There is 5% extra ETH taken than is needed for the transaction to account for price slippage and impact. from the mint UI:
image

The actual cost of underlying assets (not accounting for impact) is displayed here and compare to main net prices:
image

If the cost is more than 2% higher on polygon than on main net, the UI will block the mint.

So I dont think the problem is as bad as you thought. Having said that liquidity for RAI/ETH could be better and I would support using treasury funds for that. I don’t think we would want to cut rewards to the only pool providing us with usable liquidity, until there is other liquidity that can be just as useful.

Ah okay so there was a misunderstanding, there is the option of injecting liquidity then cutting nDEFI-RAI. Increase the weights of the other nDEFI polls to compensate and increase the weight of the RAI-ETH pool to incentivize more. I’m going to have a poll set up to see where we would like to take this into a proposal then we can work out the details from there.

Alright we will be going with Concept #2 for the time being since it has less finality and it was the mosted voted on the poll, we can always revisit and remove RAI-nDEFI if we have to but as I see it it is still a form of liquidity for nDEFI whether its awkward or not 150k dollars worth of nDEFI is in there.

The current proposal is sadly not sustainable for the treasury as it would place almost 90% of current Polly liquidity to RAI-ETH LP. The Overall BAO treasury would take also a dent with nearly 10% allocated to sustain nSTBL.

This is also a fair warning to us that we cannot create and sustain new markets against ETH on Polygon/Sushiswap.

I think we should find another way to circumvent the issue ;

This proposal as it is could be push forward to PIP, but I really think it could harm the treasury in the long run (What if we need that liquidity back ?)

Thank you for your initiative @Jester. The “why” is still there and I think the concept still needs to be refined.

Thanks for taking the time to write this, I had no idea on the treasuries situation and I was working with outdated figures when trying to apply this. This may become a Polly Hotfix Proposal instead of a RAI-ETH sole issue, we would only be treating the symptom and not the issue itself, we are currently limiting ourselves to sushi lp’s for minting soft synths when really there isnt any good reason to if using multiple AMM is possible I hadnt even considered that. We could also open our range of assets other than just RAI-ETH. I’ll be rewriting the concept here shortly and most likely rebranding it.

I would rephrase the last paragraph a bit. Thoughts?

By starting using the DEX aggregators 1inch, we will be able to optimize our sources of liquidity and save on costs per mint by ensuring we have the best deals on Polygon for our underlying assets and in the case of RAI be able to capture more of it as it enters Polygon no matter what AMM it is, as it is a scarce token on this network. Also, this would benefit Polly in the long term because we wouldn’t be obligated to always create a market on Sushiswap for them.

The proposal will leads to the Smart Contract galaxy to write a different strategy of the nest to rely on 1inch to acquire the underlying assets instead of Sushiswap.

I’m sure there are key different wordings that I’m not seeing, what is the difference between what you are saying and what Ive said?

A little rephrasing at the beginning, a bit of purpose at the end of the first paragraph.

But more importantly, a tangible action for the galaxies to tackle the proposal.

You mean wouldn’t be right?

Yeah sorry for the confusion

Alright! I included it with small edits, I agree I did kind of leave action up to interpretation abit to much. I really like how this has turned out. Honestly the concept part for governance is great allows for reiteration. Im ready for this to move onto Proposals

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