Thanks @0x-kingfish for kicking this off!
RAI/ETH uni v2 mint requirement & rewards
I think I agree with @deif and @kyoronut and maybe we can leave the current RAI/ETH pool as is—both without the mint req and at only 20 FLX/day. If the mint req was added, liquidity would be thinner as kyo mentioned, and that might justify a higher FLX payout. Also if the subsidy is lower, the influence on the rate from not having the mint requirement is also lower, so it isn’t quite as bad IMO. I would still be open to adding a mint requirement in the future if controller bias is a more urgent issue than having liquidity in the uni v2 pool for the RAI/ETH price oracle.
Summary:
- leave RAI/ETH uni v2 rewards at 20 FLX/day
- leave the mint requirement off (for now)
FLX staking
On this one I agree with @0x-kingfish and disagree with @kyoronut - I would like to see the FLX staking rewards go to 0 and the FLX/ETH insurance pool disabled for now as well. My original reasons for wanting this were:
- I hate the UX of ETH/FLX staking, the locked rewards escrow is annoying too
- communication about how the staking auctions works also leaves much to be desired, most RAI users don’t seem to know for example, that only 30% of the staked ETH/FLX is auctioned off during a slashing event
- because RAI hasn’t had any bad debt, we don’t actually know if anyone is running the staking auction keepers, so there is a chance that bids are low and the insurance pool doesn’t actually do anything
- ETH/FLX stakers can’t vote in governance
- increased liquidity for ETH/FLX is actually inversely correlated with RAI governance security IMO, especially bc staked LPs who are likely to be long-term aligned can’t vote, and yet an attacker can buy out their FLX and use it to vote…
However, in the process of writing this post, I realized that we actually fucked up ETH/FLX staking even worse than I had originally thought when we updated the popDebtDelay to 28 days. The problem is that the thawing period for ETH/FLX stakers is still 21 days, so in the event of a looming failed liquidation cascade, the ETH/FLX stakers could bounce in the first week and leave the system unprotected.
So I think we should completely remove ETH/FLX staking rewards and the entire staking/slashing/insurance pool flow immediately. We can potentially add it back later if we better think through the UX, security, and if the community demands it.
Summary:
- reduce FLX staking rewards to 0 in February
- eliminate the stake slashing flow from the RAI system (for now)