Vote on Balancing Curves Parameters Setup & Ongoing Draft BIP’s Discussions
We are excited to announce the upcoming vote on BIP-0008, which focuses on setting the Balancing Curves Parameters within our aggregator. The vote is scheduled for tomorrow at 12 PM UTC (20.06.2023) and will last for ~24 hours. Follow this link to our Gitgub to learn about proposed parameters: https://github.com/BabelFishProtocol/BIPS/blob/main/BIP-0008.md
Balancing Curves are a crucial milestone that plays a pivotal role in maintaining equilibrium and optimal liquidity levels for stablecoins within our aggregator. This is not only significant for our protocol but also for Sovryn and the entire Rootstock blockchain. Balancing Curves enable us to tackle the challenge of imbalanced liquidity across different stablecoins and chains, which directly impacts user experience and transaction efficiency.
The vote on the parameters marks another important step for our protocol. By establishing appropriate parameters, we aim to create a fair and efficient system that rewards users contributing to liquidity while discouraging excessive supply of certain stablecoins. It allows us to dynamically adjust fees and rewards based on the demand and supply of stablecoins (within a set threshold). This incentivizes users to bring stablecoins with higher demand, ensuring deeper liquidity for those assets. Simultaneously, it introduces penalties for stablecoins with lower demand, discouraging an excessive accumulation that could hinder liquidity across the ecosystem.
It’s important to note that the current BIP for Balancing Curves Parameters Setup will be voted on in its proposed form, but this is an iterative process. This vote is just the first step in determining the Balancing Curves parameters. In the future, we anticipate the need for readjustments as we add new stablecoins, support new chains, or adapt to shifts in the stablecoin ecosystem. Close monitoring of the aggregator’s performance, user behavior, and overall industry situation will be required. By carefully setting the Balancing Curves parameters, we can strike a balance between maintaining sufficient liquidity for commonly used stablecoins and reducing the concentration of stablecoins with lower demand. It is crucial to remember that BabelFish also aims to mitigate idiosyncratic stablecoin risks, fostering a healthier and more stable environment for users to seamlessly transact and exchange their stablecoins. Ultimately, our goal is to create a robust and decentralized ecosystem that caters to the evolving needs of our users.
As we approach the BIP-0008 vote on setting the Balancing Curves parameters, we invite all community members to actively participate in shaping the future of our aggregator. Your involvement is not only crucial in the vote itself but also in the discussions on other draft BIPs that could be voted on next. These proposals represent important milestones as well.
Currently, there is a discussion taking place on our forum about replacing ZUSD with DLLR. Initially, the migration of DOC was also proposed. However, based on user feedback and the current proposed setup on Balancing Curves Parameters, we have concluded that replacing only ZUSD with DLLR is the right step to take. DLLR offers more use cases and enables us to lend out a portion of the aggregated stablecoin to generate income, aligning with the second discussed proposal. Leveraging the lending capabilities offered by the Sovryn platform, this proposal aims to create additional value for the community. Engaging in lending activities presents an opportunity for the protocol to generate passive income that can be utilized in various ways. However, the final decision on this matter will be made at a later stage. We would like to initialize vote on migrating from ZUSD to DLLR on Wednesday.
We appreciate your engagement and encourage you to contribute your valuable insights on our forum as we strive for continuous improvement. Together, let’s build a vibrant and efficient platform that meets the liquidity needs of the entire crypto space.
We are still in the early stages of our journey, and building on top of Rootstock — a Bitcoin sidechain — serves as a launchpad for our protocol. It provides a solid foundation as we work towards our goal of creating a more liquid future.
Stay tuned for further updates as we continue on our path of growth and development.