It has been 11 days since we launched the Omnipool following our plan for a phased release which was proposed here and later approved by the HydraDX community. One of the reasons why we adopted this gradual approach is to monitor performance and tweak any parameters as we move forward and gain a better understanding of how the Omnipool behaves in the wild.
This proposal is to adjust one of the Omnipool parameters. As you’ll understand from our blog “Feeding every Hydrahead”, there are LRNA stabilization mechanisms which help reduce IL for LPs over time, one of which is described in the blog as “ Whenever LRNA is sold back to the Omnipool, the accumulated Protocol Fee would be activated to burn LRNA until ~2x the amount of LRNA sold back is burnt. This provides an interesting game theory dynamic as the Protocol Fee helps support the price of LRNA. ”
After reviewing the early performance of the Omnipool, we came to the conclusion that the so-called HubAssetImbalance is currently configured to burn too much LRNA. Against this background, we would like to propose the following two actions:
Tweak the parameters in a way that reduces the amount of LRNA burned by the imbalance mechanism, thereby allowing it to operate closer to our conception;
Reset the current HubAssetImbalance by setting it to zero.
Runtime upgrade to v15.1.1 release notes
Please note that adjusting the parameters of the LRNA imbalance mechanism and resetting the HubAssetImbalance will not have any negative impact on past trades or provided liquidity.