Formalize a set of necessary permissions to launch the Range Bound Stability system.
Approve an initial set of parameters for the system implementation.
Approve a set of emergency conditions under which the autonomous operations of the system could be stopped by the Policy multisig to prevent exploits, bugs, and/or unexpected behaviors that can be harmful to the protocol.
Approve an estimated 12 month budget to fund triggering key functions by keepers
Approve the launch of RBS
The implementation of the RBS system aims to increase automation and bring stability to the Olympus ecosystem in an algorithmic manner. Proper configuration of the system is of great import to minimize risk.
The RBS system will always have room for improvement and further automation using a dynamic controlling system. The Policy team wants to progressively increase its robustness and autonomy, as the understanding of the system increases and its behavior is proven over time.
To speed up this learning curve, and to provide an optimal set of initial parameters, the Policy R&D team has created extensive simulations of the system. The team tested the system under different market conditions to fine-tune an initial set of parameters, which serve as a starting point and a benchmark for both future parameter iterations and a more advanced controlling system.
Since the system will have the ability to autonomously perform market operations using Treasury funds, it is extremely important to progressively add funds to the system and have a backstop method to be able to stop all market operations if malicious actors are able to exploit the system. To that end, this proposal requests the authority for the DAO to turn off the system by closing all active markets and setting capacity limits to 0.
Parameter Simulation Report
The Policy R&D team has created a report of the modeling and simulation effort done to fine-tune the initial parameters.
This report recaps all the development steps, as well as the analysis framework that the broader Policy team used to come up with the final parameter proposal.
The report can be found here.
Initialize the RBS system with the following parameters
length of the target price MA: 30 days
max liquidity ratio: 0.14375
ask/bid factor: 0.095
cushion factor: 0.3075
wall offset: 0.295
cushion offset: 0.1675
mint and sync: 0
reinstate window: Yes, 18/21 epochs
Initialize the RBS system with the following price target:
- initial price target: 30d MA at time of launch
Approve the treasury team to fund the new treasury contract in multiple stages from the current treasury contract.
reserves: all DAI in the Olympus treasury contracts
liquidity: all DAI in Olympus treasury owned LP positions (including Balancer, Aura, Curve and Fraxswap)
liquidity ratio: liquidity / reserves
Set up the Policy multisig as the admin of the Operator contract, effectively giving it permission to perform an emergency stop of the RBS system if any of the following conditions are met:
Flash loan / Exploit / Treasury attack (>2x capacity lost in 24h)
Manipulation of the price oracles (Chainlink oracle price delta >10% from Balancer main pool price)
Market capacity >10% delta vs calculated theoretical
Fast price depreciation (>20% price breakout outside lower wall in less than 6h)
An emergency stop is comprised only of the following actions:
Deactivate RBS operations
Close all active markets, halting all current bond emissions (both reserve and inverse)
Fall back to OIP-94B temporarily until RBS goes back online
The Policy multisig would not have the authority to touch the system other than described above.
- Approve 5,475 OHM for keepers
As part of RBS, there is a beat() function in the Heart.sol policy. This function is critical to running RBS and needs keepers (bots) to trigger it. Due to that, we’re requesting a budget for these keeper rewards. Our best estimate is that we’d need 5,475 OHM a year for these keepers, but it may be more or less depending on OHM and ETH price, as well as gas prices in general.
After at least 1 month of the RBS system being active, the community should re-evaluate the need for this emergency shutdown authority. The hope is that with enough time, the system can be proven enough to warrant a fully autonomous and automated operation.
Poll: approve RBS launch initial parameters, emergency powers, and keeper funding? Poll will be live until Monday 14 November, and if passed then immediately go to Snapshot.