Reduce ACX emissions to WBTC LPs

Author(s): ACX Emissions Committee (Kevin Chan, David Korpi, Ryan Carman, Dylan O’Reilly, Chase Coleman) Status: Proposed Related Discussions: Reduce ACX emissions forum post, Emissions committee

Summary:

The Across DAO should decrease ACX emissions for Across WBTC LPs. The WBTC liquidity pools are being rewarded a high APY in comparison to the utilization of the asset. The ACX Emissions Committee only has permissions and a framework to control ACX emissions for ETH, USDC, USDT, and DAI. We are putting together this proposal to decrease WBTC emissions in a similar way to ETH, USDC, USDT, and DAI.

Motivation:

The Across DAO should optimally manage ACX emissions for all liquidity it incentivizes. One way that we have done this previously is by creating the ACX Emissions Committee (AEC). The AEC uses a transparent and restrictive framework to adjust emissions awarded to Across ETH/USDC/USDT/DAI LPs. The framework monitors the utilization and comparable yield alternatives of each asset to make ACX emissions adjustments. Across WBTC LPs were originally excluded from the AEC's purview because there were less yield comparisons available.

At this point the WBTC LPs are being paid more ACX emissions than we believe necessary to maintain a healthy WBTC LP pool and support the WBTC volume that we have been seeing. The WBTC utilization has rarely exceeded 50% and, when compared to other assets like ETH/USDC/USDT, we appear to be attracting too much LP in WBTC. For example, the USDT LP pool, at the time of the original proposal, serviced more volume in spite of only have $6.6MM of total LP size while the WBTC LP pool is closer to $25MM. We currently pay 2x more emissions to the WBTC LP than the USDT LP and are offering a 5.27% APY which is almost entirely paid in ACX (due to lack of WBTC bridge volume).

Specification & Implementation:

The WBTC LP emissions are currently 7,500 ACX per day. Our proposal is to lower this by a relatively modest amount to 5,250 ACX per day. If approved, this will be implemented by the AEC.

Rationale:

Rationale is described above. Please also reference the logic from Dylan's comment on the forum thread.

Downside (Cons):

The only downside is that this is likely to decrease the size of our WBTC LP but we believe that we can support the same, and more volume, even if the WBTC pool dropped to 50% of its current values.

Voting:

A yes vote means that you would like to decrease the ACX emissions being paid to WBTC LPs from 7,500 ACX/day to 5,250 ACX/day.

A no vote means that you would like the ACX emissions being paid to WBTC LPs to stay the same.