Preon Finance is a CDP protocol built on Arbitrum that offers 0% interest borrowing on yield bearing assets. Preon’s core product is STAR, an overcollateralized USD stablecoin.
Motivation:
This proposal aims to add a veBAL gauge for STAR/USDC.e 50/50 Composable Stable Pool. Platform incentives would help deepen STAR liquidity as we seek to diversify liquidity positions. We aim to incentivize pools, especially our veBAL gauge in coordination with Hidden Hand & Aura to facilitate incentivization and drive the Balancer bribe market forward
Centralization vectors: No single person has admin controls over the protocol. The treasury and some parts of the protocol are secured by an 4/8 multisig of public members.
Market History: $STAR is a new stablecoin. Been trending around $1.00 since inception.
Value: This is one of the few STAR pools deployed on Arbitrum resulting in high TVL on Balancer. We expect it to generate a significant amount of volume which will be beneficial for all LPs and users of Preon and the Balancer Ecosystem.
The Balancer Maxi LM Multisig eth:0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv4 at 0x5DbAd78818D4c8958EfF2d5b95b28385A22113Cd and call the addGauge function with the following arguments:
gauge(address): 0x329cAebB9be5144C5727347F64F8B3a3B109ec57
gaugeType(string): Arbitrum
Just spoke w/ Simsala and it seems like they are good actors that will be aligning with Aura/Balancer in the future and bringing value to the ecosystem. Looking forward to working w/ them more going forward!
@Tritium, can you help Simsala to get this BIP’s specification and payload set up? Thanks, brother.
The reason we have chosen USDC.e is simply because it’s the liquidity token we have been pairing ourselves with. We are open to switching it to USDC if needed.
Regarding the question of why we are not using a Stable 4Pool, the answer is that these routes have become progressively more expensive to swap through. Additionally, we want to avoid adding excessive smart contract complexity to one of our Primary Liquidity Hubs.
Please feel free to reach out if you have any further questions.
Some more points here, are you comfortable with a lower swap fee and A factor? 1% is quite high for a stable coin pool. Would expect 0.005 - 0.04% roughly, also i think the max A factor of 5000 is high for a newer stablecoin. A = 100 - 500 range is more conservative for something like this. Please let us know your thoughts.
That’s understandable; though the “swap” is not necessarity more expensive if you pair with the 4pool; as it’s swap fee percentage is only 0.01%, while the advantage is that you can swap usdt, usdc, dai etc “directly” to your stable, instead of finding another liquidity source for them to usdc.e first. Agree on “smart contract complexity” as it does introduce more complicated smart contract dependencies.
We have decided to make the following updates to the framework (please implement these changes as only the DAO has the authority to modify the values):
A Factor: 500, with scaling applied as TVL increases.
Swap fees: 0.04%, as proposed.
We appreciate all the contributors for their efforts in reaching out and working towards enhancing this proposal!
I agree that implementing the ability to swap between USDT, USDC, and DAI would be beneficial in the long run. However, for the initial iteration, our priority is to ensure maximum safety, especially since the average user is already taking a risk by minting a new stablecoin. I genuinely appreciate your suggestion, and we will certainly take it into account for future iterations of our pools within Balancer
