We’ve talked a bit in Discord about pool durations for SYV2. This originally stemmed from a conversation with Defi Dad where he didn’t see much value in 1 or 2 week pools because people can reasonably expect to sit in farms that long so a fixed rate isn’t very valuable.
Similarly, some of the larger funds are looking at helping us scale liquidity for LONGER durations vs. shorter durations.
Since liquidity can be provided via FIAT once we start working more closely with them in Q1 of next year my proposal is this:
For stablecoins I think we start with 30 & 73 day pools. 73 is an odd number but 365 is divisible by 5 so we’re able to roll out a maturity where the subscription date is always during the working week (M/T or Th/F). This also helps in the scenario we aren’t 100% ready for 90 day pools yet.
My proposal is we utilize the 73 day pool for our first launch on Optimism (into Velodrome) for the sUSD/USDC pool (anyone can comment if we want to go into riskier stablecoins but based on predictions to this point and my last Medium post I think the DAO can show profits at these levels. In this case I’m also proposing we increase the funding rate to 1% as a starting point.
We don’t yet have a mechanism that allows us to roll pools for main net to various roll ups so I think we keep the 30 day pools on main net for now and introduce a 73 day pool on Optimism into Velodrome.
Next point, we’ve talked to funds where the thinking is that t-bills (or let’s just keep this simple and say the federal funding rate may go to 6%). This will inherently make defi yields to treasuries less attractive. In order to combat that I think we look into ETH staking pools since we can assume ETH staking will likely sit at above 6% &, furthermore, most millennials and younger would likely rather sit in longer durations of spot ETH and the USD.
So after we launch the pools on Velodrome, I think we can talk to both Lido and FIAT about how we can integrate BBV2 via ETH staking into their offerings as well and work on building deeper partnerships into the industry.
Finally, while we launch these pools, we will continue to add new originators so if we want to roll over the AAVE main net pools into, say Curve, we have the flexibility to do so.