Hey team,
Addressing the planned use of vlCVX for gauge weight on week of 12th May. The approach to split vote across all ibAsset+USDC pools seems like it will produce more downsides & risk for the protocol than benefits.
Consequences of this action will be;
- More capital flight from ibAsset & Synth pair pools (adding to the flight we have already seen from all other ibAssets, other than ibCHF & ibEUR)
- Negative sentiment from farmers due to having to exit LP pairs in directly correlated stable to stable pools (i.e. ibEUR+sEUR), and cost associated to exchange into ibAsset+USDC pair
- Sustained pressure on internal AMM to facilitate USD stable exists from ibAssets, adding to the near 40m depletion of the MIM+3CRV pool held by treasury
- Drawback from amount of ibCHF borrows, due to lower yield returns available (i.e. less protocol fees from this source)
Likely overall reduction in fees for protocol from mint & reserves as a direct immediate result.
The only major benefit here seems to be the CRV+CVX earning opportunities from the POL positions.
During a period of risk around stables in general due to the recent events with UST, surely it would be wise to reconsider this position & look to continue with a consistent approach.
Any further panic in stable markets could led to a large imbalance in these pools.
This should be considered in addition to the fact that there is such a low informational overhead available on ib stables for farmers, and no access to official groups to ask queries - in times of risk, this will amplify sense of uncertainty for users.
Vote closes at 1am on 17th May, so I would urge the team to reconsider vote urgently with these risks in mind