SIP-2007: Direct Integration - Peg Balancing

Author	Kaleb
Status	Rejected
Type	Governance
Network	Ethereum & Optimism
Implementor	TBD
Release	TBD
Proposal	Loading status...
Created	2022-03-09

Simple Summary

This SIP proposes providing the below multisigs, controlled by a subset of the members of PDAO & Core-Contributors, direct integration privileges, allowing them to perform exchanges between sUSD and sETH at 0 fees:

On Optimism 0x3cbaB31E655529Ba3CeFfdf79C97bbF3afEB831D
On Ethereum 0x8d8010ea725746b76baffa20968ecb0a5b2cc247

Abstract

As outlined in SIP-267, every new Direct Integration needs to be specified in a sip along with the parameters proposed for that integration. Therefore this sip proposes to allow special addresses ability to perform exchanges between sUSD and sETH with no fees.

Motivation

The primary motivation is to exhert some control over the peg by performing the below in either direction:

ETH > sETH (Wrappers)
sETH > sUSD (Exchange)
sUSD > DAI (Wrappers or AMM's)
DAI > ETH (AMM's)

These transactions will help manage the following:

The premium on sUSD vs DAI, performing the above would lower the sUSD peg to around the fee paid on performing an ETH > DAI swap on the best amm available
Allows unwinding of the DAI wrapper
Allows strategic control of the composition of synths, as to limit outsized impacts on the skew

Restrictions & Limitations:

All excess ETH made from performing any operations would be sent to Treasury
All operations done on those multisigs would be performed solely with the intent of aligning the sUSD peg with that of the sETH peg
The SC would be able to disable these privileges by simply voting on an SCCP that revokes the 0 exchange fee

Specification

The following parameters would be specified on the multisigs:

On Optimism 0x3cbaB31E655529Ba3CeFfdf79C97bbF3afEB831D
On Ethereum 0x8d8010ea725746b76baffa20968ecb0a5b2cc247


{'currencyKey': 'sETH',
 'exchangeFeeRate': 1 wei}
 'atomicExchangeFeeRate': 1 wei
 'exchangeDynamicFeeRounds': 1}