MPG-0┃ Migrate PAR liquidity incentives on Ethereum to Curve

Summary:

We propose to migrate the PAR liquidity to Curve to have a better liquidity on the PAR on Ethereum.

Context:

Curve is a decentralized automated market maker launched in January 2020 with the aim to have an on-chain forex by using concentrated liquidity ranges. The V1 of Curve only allows users to create pools with pegged assets but in June 2021, Curve launched V2 Pools which allow users to have concentrated liquidity on non-pegged assets. According to DefiLlama, Curve is now the DEX with the highest TVL in the DeFi ecosystem and a lot of protocols are currently moving pools to Curve.

The most efficient DEX on Ethereum was Balancer for non-pegged assets, however today Curve provides better swap rates for pegged and non-pegged assets. The aim of this proposal is to migrate the incentives of PAR pools to Curve.

Rationale:

The goal of this proposal is to migrate PAR liquidity incentives on Ethereum to a better efficient DEX, Curve. This will exclude the PAR/MIMO Balancer pool who will stay on Balancer.

Currently all incentives are on Balancer, but it’s not a very efficient way to have good swap rates between stablecoins. After observing many V2 pools already launched on Curve, we established that for the same liquidity deposited in the pool we obtained an average slippage 50% less important than Balancer for stablecoins. The concentrated liquidity will allow the PAR to sustain a better price with more significant swaps. In addition, increasing the incentive will attract even more liquidity.

Following discussions on the forum, some contributors thinking that Uniswap is more efficient than Curve and would like the PAR/USDC pool on Uniswap and not Curve. So we decided to let the DAO choose via the governance vote.

Incentives Overview:

There is also a PAR/MIMO Balancer Pool live on Balancer. We propose to keep this pool on Balancer and reduce the yield from 28% to 26% of the Ethereum emissions.

Currently the PAR/MIMO Balancer Pool is 75/25 weight, we propose to change the weight to 20/80. The weight change will provide a better impermanent loss management.

Means:

The code is already ready to be deployed by the developers. There is no cost change for the treasury.

Technical Implementation:

Staking contracts for Curve Pools.

Voting Options:

• Yes, use Curve for PAR/USDC Pool
• Yes, use Uniswap for PAR/USDC Pool
• No
• Abstain