Summary:
Following the adoption of the The Framework, this RFC seeks to open a brief discussion around adjusting a few key parameters in the RBS System that will ensure it is better turned for the current macro environment.
Motivation:
With the introduction of DSR yield being directed towards buying back OHM, it is important that we appropriately tune the upper quadrant of RBS so that it can create bond markets efficiently and effectively given the new market operations. Following the launch of buybacks, the market pushed OHM price into the upper cushion which produced a bond market for eight hours. While this behavior was working by design, the distance of the spread from the target price to cushion can be more effectively tuned.
Proposal:
Recommendation to adjust the following RBS Parameters:
- Adjust the upper spread between Target Price and Upper Cushion from 10% to 20%
- Adjust the upper spread between Target Price to Upper Wall from 20% to 25%
- Reduce the Upper Cushion and Wall capacity from 326k to 100k OHM.
The Lower Cushion and wall will remain configured the same as they are today (-10% to cushion and -20% to wall).
Example (Graphic and Table)
This configuration will create spread asymmetry which uses a new feature introduced into the RBS System several months ago. It will also create a revised range (Spot Market to Cushion) that buybacks can exist within,
As this is a more operational change, the RFC and OIP will be condensed and remain open for a three day commentary period before advancing to Snapshot. Please feel free to discuss here or on the associated thread on Discord.
