Optimizing BabelFish: Updated Balancing Curve Parameters

At BabelFish, we are committed to ensuring our platform meets the current needs of our users and proactively adapts to shifts within the stablecoin landscape. In response to changing external conditions and our commitment to maintaining the platform’s reliability and security, our community has decided to phase out BUSD (corresponding changes were applied both to the frontend and backend). This decision is in line with achieving DLLR’s target weight, a milestone that enables us to adjust its Target Weight downwards confidently. This adjustment will create more room for other stablecoins, ensuring sufficient liquidity for our users.

Following the strategic direction established by BIP-0011, we are updating our Balancing Curves parameters. These adjustments are designed to improve the platform’s stability and efficiency and to encourage the inflow of external stablecoins.

Upon thorough review, we have made the following adjustments to the Target Weights to better align with current market dynamics and user demands:

• DLLR: Decreased to 44% (-5%).
• DOC: Remains at 0.5%.
• rUSDT: Remains at 5%.
• USDTbs: Increased to 17% (+2%).
• USDCbs: Increased to 6.5% (+1.5%).
• DAIbs: Increased to 6% (+1%).
• USDTes: Increased to 9% (+4%).
• USDCes: Increased to 6% (+1%).
• DAIes: Increased to 6% (+1%).
• rDOC: Decreased to 0% (-0.5%), as its deposits remain paused and it transitions to USDRIF.

Overall, allocations for BNB Smart Chain (USDTbs, USDCbs, DAIbs) have increased by 4.5% and for Ethereum (USDTes, USDCes, DAIes) by 6%, while allocations for Rootstock stablecoins have decreased by 5.5%.

To refine our approach and enhance the Balancing Curves’ effectiveness, we’re raising the Factor from 2,000,000 to 2,500,000. This adjustment will steepen the curves, fostering more strategic stablecoin movements within the BabelFish ecosystem. Currently, the Factor is a static value, but we are considering making it dynamic based on ongoing evaluations. A Dynamic Factor would ensure better adaptiveness and responsiveness of the Balancing Curves.

These updates are based on comprehensive analyses of market trends and user behaviors, aim to ensure that BabelFish continues to serve as a responsive, balanced, and efficient platform within the Bitcoin DeFi ecosystem. We are committed to ongoing evaluation and are open to making further adjustments as the situation evolves.

We highly value your insights and invite you to share your feedback or questions with us through our X, Discord and Telegram channels. Your input is crucial as we navigate these updates and continue our journey toward building a more stable and efficient DeFi platform on Bitcoin.