This is a proposal for a -1% purchasing power adjustment per epoch until the pools reach 50:50 or until a signaling proposal is raised to halt or change this policy.
There has been an on-going discussion within SifDAO to shift the pool composition away from its current level (72% ROWAN: 28% TKN) to a level closer to equal parts ROWAN, equal parts TKN. This proposal embodies the first step in that direction with a slow and gradual shift toward 50:50 pool ratios.
PMTP was met with great success when it first launched, although it’s effectiveness waned in overwhelmingly bearish market conditions. The implosion of UST & LUNA impacted all DEXes in the ecosystem as Cosmos assets were used as exit liquidity for UST & LUNA holders. On the most severe days of the crash (May 10th - 12th), Sifchain saw $20M of liquidity outflows each day. Approximately 7 days later (May 18th - 20th) Sifchain further saw a cumulative 10M of liquidity exit the DEX.
While the pool composition that resulted from previous PMTP policies did not create a robust environment to weather such intensive liquidity outflows, neither does the data point to it being the main catalyst of liquidity withdrawals on the DEX.
Since May 16th, we are yet to see positive net liquidity movements, however liquidity outflows have since reduced pre-terra cash levels. Furthermore, net IBC transfers in the past 7 days have changed to positive, with the equivalent of $100,000 more tokens being imported to Sifchain than exported.
As such, and given the loyalty of Sifchain’s core liquidity providers, we propose a subtle negative policy as a starting point to address the growing concern regarding the ROWAN heavy pool composition. We will continue to gather data and feedback about other available options including an r_running reset.
If this proposal passes, purchasing_power_adjustment_per_epoch will be set to the specified percentage until a signaling proposal is raised to halt or change the policy.
If you vote yes you agree to the terms outlined in this proposal and assent to changing the purchasing_power_adjustment_per_epoch to the specified policy percentages in this proposal at the stated dates.
If you vote no you reject the terms outlined in this proposal and dissent against changing the PMTP purchasing_power_adjustment_per_epoch from its current level.