Proposal: Refund Pool 19 Borrow Fees to Deprecated UST Cauldron Depositors

Hi Frog Nation,

As we all know, the first UST Degenbox cauldron launched just a few days ago, and was deprecated very soon after its launch.

Unfortunately, the oracle used for the first Cauldron was suboptimal, and consequently, a new Cauldron was released merely days after the first. The oracle for something like this is no trivial thing, so I am super happy the team updated to the most accurate available option!

However, because the update happened so soon after the launch of the first Pool, rational actors were heavily penalized for being early adopters of the initial UST Pool and then migrating to the updated, newly-supported pool.

This proposal is to refund the Borrow fees charged to depositors in Pool 19 (deprecated UST Cauldron).

Rationale: The people who were early supporters of the UST Cauldron have now been heavily penalized merely because the team did not integrate the optimal Oracle in the first Cauldron. If the team had waited just a few days and launched the Cauldron with the optimal oracle option from the onset, these excessive fees would not have been incurred; however, because this did not happen, the biggest supporters of this project who deposited into the initial UST Cauldron - which was deprecated merely days later - have incurred severe borrow fees to Deposit, Withdraw, and then Deposit again into the supported Cauldron (not to mention slippage / gas fees…).

This is a penalty for

  1. merely being an early supporter of the strategy,
  2. acting in line with the team’s recommendations and adopting the more accurate / proper oracle

Because a penalty was incurred for these two actions - which are both entirely rational & aligned with the best interests of the protocol - I propose a refund of the Borrow fees incurred for the migration from UST Cauldron 1 (Pool 19) to UST Cauldron 2 (Pool 26).

Bonus points if an estimated amount of slippage can also be covered :slight_smile:

Look forward to the discussion!

2 Likes

Additional comments based on conversations had in Discord:

  1. We don’t yet know the mechanics of the new oracle, causing MORE incentive to migrate to the new Cauldron. Because we’ve been left in the dark about performance improvements, we have to take a risk and gamble on one Cauldron vs the other. If we trust the team and go with their recommended, supported Oracle, then we are forced to migrate to the new Cauldron.

  2. Even if the oracle is a minor change, the old cauldron is DEPRECATED - meaning no new MIMs can be borrowed, and completely changing the rules of the game / functionality of the cauldron. If users want to maintain the same functionality, they NEED to migrate. This decrement of functionality merely days after launch is worth a refund in and of itself imo.

3 Likes

I fully agree with this proposal; In my particular case, early participation led me to a loss greater than just gas fees; the inefficiency of the oracles caused them to liquidate my position; my cdp indicated medium risk and more than 30% of health; Ust. It had to fall 3%, which according to my historical price sources never happened.

Hi team - can we get some feedback here?

Bumping this.

Would at least like an official response!

1 Like