SCCP-162: Update Parameters of Atomic Swap

Simple Summary

This SCCP proposes the following updates to Atomic Exchange Contracts:

• Reduce atomicPriceBuffer on trades pertaining to ETH and BTC to zero
• Reduce atomicExchangeFee on trades into of EUR to 20 bp
• Increase atomicMaxVolumePerBlock from sUSD 5 million to sUSD 15 million

Abstract

The parameters being updated as are as follows

• The atomicPriceBuffer is a parameter that worsens the chainlink price in the calculation of atomic exchange prices
• The atomicExchangeFee is the fee applied on trades into a certain synth
• The atomicMaxVolumePerBlock is the max volume allowed for trading per block

Motivation

This SCCP aims at improving the configuration of the atomic exchange function as to promote more exchange volume and integrations. Below are the main motiviations behind these parameters changes:

• To calibrate the atomicExchangeBuffer, we can see from the BTC and ETH price charts that a 30 bp fee is more than enough to cover 90% of the delta observed between the AMM price and the cex price. It should be mentioned, that toxic flow in the form of oracle front-running is considerably harder with atomic exchanges, due to the round trip of 60 bp.
• To calibrate the fee applied on exchanges into EUR, we can look at the delta between the price observed purely from chainlink against prices seen on cex which reveals that a 20 bp fee covers most of the delta.
• Finally on the atomicMaxVolumePerBlock parameter, given the liquidity on ETH and BTC in uni-v3 pools and the large number of trades that occur throughout the day, it becomes too costly to take manipulate the pools in order to move the price due to the TWAP and chainlink protection.

Copyright

Copyright and related rights waived via CC0.