[ARFC] Chaos Labs - CRV V2 Ethereum Deprecation Plan

Governance
2

As a next step, and as proposed by ACI, we recommend moving forward to a Snapshot vote next Monday, 08.14.2023, to decide on the community’s desired path forward.

The options as of now, based on Chaos’ recommendations in this post and Gauntlet’s recommendations here, are:

  • YAE (Chaos Labs)
  • YAE (Gauntlet schedule 1)
  • YAE (Gauntlet schedule 2)
  • NAY
  • ABSTAIN

Options breakdown:

Chaos Labs

Every 2 weeks, AIP to decrease LT, with a maximum reduction of 10%.

  • No predefined conditions
  • Risk teams conduct independent analyses and recommendations, which will be shared with the community in a public governance post with a consolidated recommendation.
    • If risk teams are not aligned on a single recommendation:
      • Proceed straight to AIP, adopting the more conservative reduction.
      • Initiate a Snapshot vote to gauge community preference on the more aggressive reduction suggestion.

Gauntlet Schedule 1

Each week, put up AIP on Wednesday to reduce LT by 5% if the following conditions are met

  • (size) amount of remaining debt has been cut by 10%
  • (price) new HF is greater than 1.6 (historical maintained HF without derisk measures) + 17% buffer (representing a 3 standard deviation daily CRV price move)
  • (liquidity) rolling averaged DEX liquidity (proxied by 2pct depth) > 90% DEX liquidity from previous week

Gauntlet Schedule 2

Each week, put up AIP on Wednesday to reduce LT by 5% if

  • (price) new HF is greater than 1.6 (historical maintained HF without derisk measures) + 17% buffer (representing a 3 standard deviation daily CRV price move)

and one of the following conditions are met.

  • (size) amount of remaining debt has been cut by 10%
  • (liquidity) rolling + snapshotted DEX liquidity has stabilized > 90% average liquidity compared to previous week

We would appreciate @Gauntlet feedback on the proposed next steps and welcome additional community discussion on this proposal.

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