Summary
Divert 10% of tfUSDC Farm rewards to a low fee tfUSDC/USDC liquidity pool.
OR
Divert 18% of tfBUSD and 18% of tfTUSD Farm rewards to a low fee tfUSDC/USDC liquidity pool.
This will redirect approximately 4,368,000 TRU a year.
Balancer V2 is the preferred option for this pool.
Motivation
The current liquid exit system is complex, unreliable and encourages bank runs. I propose a liquidity pool as a better alternative.
Projected impacts
-The liquidity pool should grow into the high millions, providing a deep secondary market and ensuring people can always sell their tfUSDC.
-Based on the current pool, I project a roughly 0.15% reduction in APY from USDC dilution. Roughly 0.3% of APY is being redirected to the liquidity pool, roughly half of which is USDC and half of which is tfUSDC.
-Increased usability of the liquidity pool should increase fees from trading, which counteracts the APY reduction.