Reweight Without Reweights (using cumulative deviation)

[Eswak]

@Bruno

The difference in the undo, is that ppl are also returning TRIBE. So PCV goes down but also TRIBE mkt cap is reduced

The protocol doesn’t have to burn those TRIBE, they could be added to the 40% DAO portion, or given to pre-swappers.

@Bruno

Dont you see a risk of bots frontrunning the reweight and being the first to sell

I do.

@idrealistic

it doesn’t matter if bots are first to sell because, as long as there is a predictable future reweight coming, arbitrageurs will again buy FEI in advance of the next reweight

That did not happen last week, despite the arbitrage opportunity AND the mint incentives. I think this proposed rework of the reweight trigger criteria is well-designed (in that it addresses most of the problems with the current reweight), but it should be used in addition to a “reweight queuer” or other mechanisms to guarantee an exit at peg.

The psychological aspect of being able to do risk-free arbitrage is an important tool to keep the peg.

See the following articles :

• Uniswap is the reason why algo stablecoins can’t maintain the peg and how to fix it | by Sabretooth | Medium
• Uniswap is not the reason why algo stablecoins can’t maintain the peg — incentives are. | by 0xScotch | Malt Protocol | Medium