SIP-9 | sprMAV re-pegging plan

TL;DR This proposal aims to address the recent depegging of sprMAV from its 1:1 MAV peg by initiating a Treasury buyback up to $150,000 worth of sprMAV from the sprMAV-MAV liquidity pool. Additionally, we propose to add a buying wall at the 0.85-0.9 of the sprMAV peg to help maintaining the peg more effectively in the future. It is important to note that liquidity providers in the sprMAV-ETH pool may experience permanent loss due to this re-pegging. To compensate for this loss, extra incentives will be directed towards this pool.

Summary Following the recent depegging of sprMAV from its 1:1 MAV peg, this proposal seeks to rectify the situation by implementing measures to re-establish and maintain the peg effectively. We recognize that the depegging has caused concern within the community, and we aim to address this issue promptly and fairly.

Context: sprMAV has experienced a deviation from its intended 1:1 peg with MAV. To address this, the following steps are proposed:

1. sprMAV Buyback up to $150,000 worth of MAV To restore the 1:1 peg, the Treasury will initiate a buyback up to $150,000 MAV worth of sprMAV tokens from the sprMAV-MAV liquidity pool.

2. Add a Buying Wall at the 0.85-0.9 of the sprMAV peg To maintain the peg more effectively, we propose to do a buying wall for sprMAV to a range of 0.85-0.9 MAV per sprMAV.

3. Compensation for Impermanent Loss in sprMAV-ETH Pool Recognizing that the buyback may result in permanent loss for liquidity providers in the sprMAV-ETH pool, we propose to offer additional incentives to compensate for this loss. These incentives will be allocated from the Treasury to ensure fairness and mitigate potential losses for our liquidity providers.

We believe that these measures will help restore and maintain the peg of sprMAV while providing a fair solution for liquidity providers affected by the re-pegging.

Means

• Engineering resources: No development required.
• Treasury resources:
  • $150,000 worth of MAV will be used to buyback sprMAV
  • Some USDC and ETH will be used as a wall-buyback at 0.85-0.9 sprMAV peg

Voting options:

• Approve the re-pegging plan
• Against the re-pegging plan
• Abstain