Draft BIP-00xx: Improving Aggregator Stability and Efficiency

Governance Draft BIP's
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Description

This proposal outlines three strategic enhancements to fortify the BabelFish Aggregator, addressing specific challenges and optimizing the system’s efficiency.

Part 1: Empowering BabelFish Multisig Address for Aggregator Fund Balancing

Objective: To add the BabelFish Multisig Address as a whitelisted entity within the aggregator, exempting it from Balancing Curves’ influence. This initiative aims to streamline the process of replacing stablecoins that substantially exceed the Target Weight, exchanging them for others in higher demand. A prime example is DoC, at some point after introducing Balancing Curves surpassing its target weight by over 19%. With the introduction of this feature, BabelFish Multisig signers will have the capability to promptly execute a swap of DoC for DLLR. Despite DLLR also surpassing its Target Weight, it exhibits significant demand.

Implementation:

  • Add a function to the Balancing Curves Smart Contract that allows for the exclusion of the BabelFish Multisig Address, ensuring immunity from Balancing Curves penalties and rewards.
  • Whitelisted Multisig Address 0x37a706259f5201c03f6cb556a960f30f86842d01 with required 2 of 4 signatures.
  • Multisig is providing funds in one asset at an amount corresponding to the amount of another asset that needs to be balanced.
  • Multisig performs swap between assets on Smart Contract level.

Part 2: Delegating Authority to BabelFish Multisig Signers to Decide on Balancing Curves Parameters

Objective: Empower BabelFish Multisig Signers with temporary authority to swiftly adjust Balancing Curves parameters. This delegation is designed to expedite reactions and adjustments, promoting a more responsive approach to achieve equilibrium. The authority is set to last for 24 weeks (168 days), commencing after the successful approval of this proposal. If accepted, this proposal enables a more dynamic approach to setting Balancing Curves Parameters, expediting the pursuit of system sustainability. It facilitates swift adjustments to Balancing Curves parameters, adapting to evolving market conditions with agility.

Implementation:

  • During the 24-week period, BabelFish Multisig Signers would actively decide on and adjust current Balancing Curves parameters.

  • BabelFish Multisig Signers will regularly inform the community about any parameter adjustments, providing transparency and updates on decision-making processes.

  • After the initial 24 weeks, the authority over Balancing Curves Parameters transitions to the BabelFish Bitocracy for ongoing governance.

  • BabelFish Bitocracy retains the power to potentially shorten or extend the initial 24-week period based on community decisions.

Part 3: Phasing Out BUSD from BabelFish Aggregator

Objective: Cease the aggregation of BUSD within the BabelFish Aggregator due to the discontinuation of support of it by Paxos and Binance. While BabelFish Multisig signers have already taken the authority to temporarily pause BUSD deposits, there is a necessity to implement a complete removal, as its presence is impacting Balancing Curves.

Implementation:

  • Update Aggregator Smart Contract to disable BUSD swaps from Binance Smart Chain (BSC) for XUSD on Rootstock.
  • Modify UI to reflect the removal of BUSD swaps.
  • Adjust Balancing Curves Target Weights for remaining stablecoin allocations.

Motivation

These enhancements are crucial for maintaining the stability and adaptability of the BabelFish Aggregator. We aim to optimize fund management, enhance system sustainability, and ability to swiftly adapt to changing market conditions. This proposal underscores our commitment to the long-term success of the BabelFish Aggregator.

2 Likes
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Thanks mate for the proposal, which seems valid.
Part 1: are there any reports on the current ongoing target weight allocations? How many multisig signers minimum signatures would be configured for this set up?
Part 2: ok
Part 3: This is a no brainer. Can´t though this proposal be done by Replacing Busd with another asset/chain instead? If another chain is too difficult now, then just another stable on Erc20 such as TrueUSD which is currently within the top 4 market cap on stable coins with a nive daily volume.

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Not sure if I got it right. Target weights are as it was accepted in the BIP-0008.

Ongoing stablecoin allocations are frequently monitored. As for now it looks like this:

Asset Amount Weight Target
Weight		 Deviation
DLLR 1,556,983.21 62.52% 49.00% 13.52%
USDTbs 372,816.16 14.97% 15.00% -0.03%
rUSDT 124,294.13 4.99% 5.00% -0.01%
DAIbs 118,232.18 4.75% 5.00% -0.25%
USDCbs 116,034.17 4.66% 5.00% -0.34%
DAIes 60,192.15 2.42% 5.00% -2.58%
USDCes 50,853.50 2.04% 5.00% -2.96%
DOC 50,523.74 2.03% 5.00% 1.53%
USDTes 40,440.60 1.62% 0.50% -3.38%
BUSDbs* 1.53101423 0.00% 5.00% -5.00%
rDOC* 0.96200173 0.00% 0.50% -0.50%
Total 2,490,372.32 Reward
Manager		 3,708.82
*Deposits paused.

As for Multisig signers 3 of 5 are required.

BUSD is/was on BSC. Currently this is a chain with less friction for bridging out.

If we were for adding TrueUSD - I think that we would need to add it on ETH as well. But it would require setting weights for both or adjusting weights for all stablecoins. We could go for 2.5% for both or 2% for ETH and 3% for BSC version.

Adding new chain is a bit more complicated, than adding new stablecoin on existing chains.

Anyway - I think that adding new stablecoin should be a different proposal.