EIP #2 - ePENDLE Liquidity Improvement & Action Plan

Abstract

Recently we have received a lot of community feedback indicating that the delayed notification of migration plans has resulted in ePENDLE price deviating further from its intrinsic value. We deeply understand the problems caused by not promptly and transparently informing the community. Therefore, we plan to improve this process moving forward and make the ePENDLE improvement plan more transparent.

Motivation

ePENDLE holds significant importance for the Equilibria ecosystem. It is crucial for our protocol to progress steadily towards a healthy and sustainable future, allowing our community to focus more clearly on their investments with a more stable PEG ratio, thereby maximizing their yield. Therefore, we aim to facilitate the integration of ePENDLE into the Arbitrum ecosystem, providing a more accessible and manageable liquidity option.

Specification

We propose the following adjustments:

• Relocate the current ePENDLE liquidity to Camelot DEX on Arbitrum. In line with the incentives for future LTIPP applications, we will establish ePENDLE liquidity with enhanced incentives.
• Provide EQB/xEQB incentives as per the circumstances, and leverage incentives from Camelot for ePENDLE liquidity.

Furthermore, we have submitted applications for LTIPP ARB incentives to bolster this liquidity and infuse more PENDLE to stabilize the ePENDLE price.

Moving forward, we will strive for more integrations within the Arbitrum ecosystem to provide more utility for ePENDLE. We will also collaborate with NGA DAO to bring more benefits to ePENDLE holders.

Lastly, we want to address the questions and concerns raised by the Equilibria community members, and we strive to provide more transparency in our response.

Why is it necessary to move liquidity to Arbitrum?

Moving liquidity to Arbitrum is essential for several reasons. Firstly, Arbitrum offers significantly lower transaction costs, which is highly beneficial for our growth in the early stage to drive retail adoption of liquidity provision. Moreover, Arbitrum provides a range of potential support programs that enable us to incentivize community more effectively and expand our ecosystem. Additionally, we have observed substantial growth in PENDLE's trading volume and user base on Arbitrum, making it a promising environment to foster the growth of ePENDLE liquidity.

How will the ePENDLE liquidity on Ethereum be managed?

Our aim is to consolidate all available resources, prioritizing protocol-owned ePENDLE liquidity for Arbitrum. Users who hold ePENDLE on Ethereum will be guided to bridge their ePENDLE to Arbitrum through our platform. Once we have established sufficient liquidity on Arbitrum, we will then proceed to rebuild the ePENDLE liquidity on Ethereum.

Why wasn't this transition done earlier?

Initially, Equilibria utilized the Arbitrum official bridge from the outset, enabling cross-chain transactions between Ethereum and Arbitrum. However, this process required a mandatory 7-day waiting period, which introduced friction and delays.

To enhance user experience and reduce this friction, we researched and compared multiple cross-chain bridge solutions, and selected LayerZero as the optimal solution for ePENDLE. The development and auditing process for the new bridge took several weeks to ensure the highest level of security and reliability. Once the new bridge was launched, we then focused on guiding users through the migration process, which involved migrating their old ePENDLE tokens to the new bridged ePENDLE.

We value your input and engagement in this decision-making process. If you vote "Yes," we will proceed with the aforementioned plan. However, if you vote "No," we will continue with our current strategy, primarily focusing on incentivizing ePENDLE liquidity on Balancer on Ethereum.