The first proposed change to Equilibrium’s governance: 1.8% APR

May 06, 2020
The first proposed change to Equilibrium’s governance: 1.8% APR

We are casting a vote on a proposal to raise Equilibrium’s stablecoin fee to 1.8%

Over the past year, Equilibrium’s EOSDT stablecoin has grown into a mature product capable of withstanding significant market volatility. The crypto market recently saw its two biggest single-day price drops in June 2019 and March 2020, not to mention DDoSS issues and resource clogging on the EOS network. EOSDT is a proven effective means of on-chain liquidity management, and the numbers speak for themselves: trading volumes are growing steadily and general on-chain adoption is rising.

Now that we support BTC collateral, we’ve reworked the framework as a line of new and exciting products for our users.

We’ve been gathering a bunch of data from the framework to further our understanding and modeling of the system. One of them is a parameter related to $EOSDT’s peg — this becomes especially important as Equilibrium prepares for forthcoming listings of EOSDT on major exchanges.

At this point in the game, we have one major source of liquidity where we can meaningfully gather and analyze this data: HitBTC markets. Their proxy for USD is the EOSDT/USDT pair. By looking at intraday data for the past year, we’ve estimated that EOSDT’s median absolute deviation from the peg has amounted up to 0.3 cents.

This deviation could be attributed to market makers and their inventory management. Opening new markets will increase liquidity and EOSDT trading volumes alike, scaling up the current system and its specifics. This means our mandate is to defend the peg. That’s why we’ve generated the proposal to raise the fee to 1.8% APR.

This represents a 0.8% increase over the way things are now. 1.8% APR is a model-based solution that accounts for existing market data and the levels at which EOSDT is distributed among its holders.

Keep in mind that the EOSDT savings contract will launch soon, and we’ll make plenty of noise about it when the time is right. The savings contract is a mechanism that will close the loop on EOSDT’s peg stability. Changes in stablecoin fees affect the supply side by targeting its generation and payback intensities, while the rewards from the EOSDT savings contract affect the demand side by offering a “risk-free” return on EOSDT’s stake.

This proposal is an important milestone for Equilibrium EOSDT because it marks a big step in the evolution of its decentralized governance process. We do ask you to support the voting by staking Equilibrium’s Native Utility Tokens (NUT) on the governance contract (simple transfer) and using one of the methods below. You can of course unstake them after that.

1. Call the ‘vote’ action manually via

voter = Your EOS account name
proposal_name = chngstabfees
vote: //1 = Yes, 0 = No
vote_json = Empty

2. Or call it via Cleos:

push action eosdtgovernc vote ‘{“voter”:”equillibrium”, “proposal_name”:”chngstabfees”, “vote”:1}’ -p equillibrium@active

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