[Indicative Vote] Launch of AMO pool with 200k GYD on Base

Summary of proposal

To mint (but not issue) 200k GYD on Ethereum mainnet and bridge it over to an AMO pool for GYD on Base, similar to the Gyroscope AMO pools that already exist on Ethereum and Arbitrum (AMO = algorithmic market operations, previously also referred to as ‘bootstrapping pools’). The AMO pool, which has been deployed for this proposal, is an E-CLP. The result on the protocol will be an increase in the minted but unissued supply of GYD on Base.

Background/motivation

The motivation for a bootstrapping pool is to provide a streamlined issuance route for GYD on new blockchain networks, and in this case, Base specifically. Rather than passing through all of the checks and balances of the full GYD stablecoin on Ethereum, an AMO pool allows for some minted but unissued GYD to sit in a pool, where that GYD can then be swapped out by swapping in the other asset in the pool.

In this case, users can swap aUSDC into the pool and receive GYD out on Base. AMO pools are meant to maintain a bootstrapping of GYD liquidity. As GYD grows, AMO pools are intended to be balanced with the main GYD reserves on Ethereum, and AMO pools such as this may be partially or fully unwound into the main reserves on Ethereum over time.

Feedback from Step 1

The Consultation feedback was positive with no changes requested to the proposal.

Risk assessment

A ‘bootstrapping pool’ allows a pre-set amount of GYD to be minted in a simplified manner against a specific reserve asset. The bootstrapping pool structure bypasses the normal Gyroscope minting and redemption structure, including the extra minting and redemption safety checks and reserve diversification mechanisms. Should aUSDC depeg, it could have an outsized effect on the Gyroscope. However in this instance, the 200k size means that the bootstrapping pool is small compared to the overall GYD system, serving to reduce this risk.