Summary

We propose winding down the borrowing pool by – (1) turning off rewards rewards generated by staking USDC to the Liquidity Staking Pool, (2) removing the deposit functionality for the Liquidity Staking Pool from https://dydx.community/dashboard, and (3) sending the remaining rewards (383, 562 DYDX per epoch) allocated to users who stake USDC to the Community Treasury.

The reasons for proposing to wind down the borrowing pool are - (a) the dYdX community is paying DYDX rewards for underutilized USDC capital, (b) prospective borrowers provided inadequate disclosure, and (c) the structure of the borrowing pool negatively impacts competition among LPs.

DRC: https://commonwealth.im/dydx/discussion/5661-drc-winding-down-the-borrowing-pool

Voting Options

• Yes: Execute the proposed changes by:

  1. turning off rewards rewards generated by staking USDC to the Liquidity Staking Pool,
  2. removing the deposit functionality for the Liquidity Staking Pool from https://dydx.community/dashboard, and
  3. sending the remaining rewards (383, 562 DYDX per epoch) allocated to users who stake USDC to the Community Treasury.

• No: Do nothing.

Next Steps

If this Snapshot vote is successful, the full implementation of this proposal (points 1 and 3) requires an on-chain vote and the subject matter falls under the requirements of the Short Timelock Executor (https://docs.dydx.community/dydx-governance/voting-and-governance/governance-parameters).