Tl:dr Given the extreme liquidity conditions currently experienced by CRV, the following proposal is to fix the cauldron oracle price at price optimised to retain value for the DAO to avoid liquidations during a cascade.
Background
Last month, a community member highlighted the risks around Abracadabra’s two CRV cauldrons in a forum post. Since then, Curve has faced several issues that have impacted its protocol TVL including the Conic hack, the JPEG’d hack, and the Curve hack.
Part of this hack involved the CRV/ETH pool, draining most of the on chain liquidity for CRV, changing significantly the liquidity conditions that brought to the listing of CRV as collateral on Abracadabra.
Additionally we have seen CRV collateral outflowing from our markets into markets with lower LTVs and higher interest.
This has impacted both the price of CRV as well as the liquidity around the token.
Proposal
The purpose of the proposal is to grant Abracadabra DAO the authority to execute a timely swap of the existing oracle responsible for pricing CRV tokens. The objective of this swap is to prevent any inadvertent selling of CRV tokens during cascading events. By promptly conducting the swap, the DAO can effectively extract and secure the CRV tokens into the treasury, ensuring their safety and minimizing potential risks associated with cascading events.
This would take effect on both CRV cauldrons.
The following proposal would bet on the fact that after the possible cascade, CRV is still valuable and would allow Abracadabra to take part in the rebuilding process that would follow this steep drop in price.
Voting
Given the time sensitive situation that revolves around CRV price, the following proposal is already live on snapshot voting. If passed it will give grants to the DAO Multisig to swap the oracle in case of a cascade start.
Voting is now live here.
Voting ended and proposal passed.