Migration of Incentives from axlUSDT/USDC to USDT/USDC and StableSwap expansion

Migration of Incentives from USDC/axlUSDT to USDC/USDT and StableSwap expansion

This proposal asks that the incentives program migrates incentives from the Stableswap pool of USDC/axlUSDT to the pools comprising the USDC/USDT Supercharged pairings created in Proposal 579 and expands the Stable/Stable category requirements to include Supercharged pools.

Background

With Proposal 574, Osmosis governance has recognized USDT via Kava as the canonical version of USDT.

This status comes with the promise that the canonical status of USDT will receive higher incentives than the non-canonical version.

This proposal would cause the removal of incentives from the USDC/axlUSDT Stableswap pool at the next incentives proposal, removing the pool from the incentives system. As incentives proposals now occur monthly rather than weekly, this will take place in a single proposal, with the passing of this proposal being advanced notice of the change.

The two OSMO/USDT Supercharged pools created in Proposal 579 will be added to the incentives system at the next routine incentives proposal.

Both pools are added to the incentives system to allow the optimal spread factor to be used from the two options of 0.05% and 0.01%. The pools will therefore be incentivized based on their performance. As there is no bonding period for normal Supercharged liquidity, this should encourage the movement of liquidity between the two pools as required to provide optimal trading liquidity. This represents a movement towards the incentivization of pairs rather than pools.

Proposal 377 defined a requirement for all pools in the Stable/Stable category to use the Stableswap curve. To add the USDC/USDT supercharged pool to this category, this requirement would be expanded to include Supercharged pools.

Target on-chain date: No earlier than 14th August 2023

Do you want to load both steps in 1 proposal? Since it effectively asks for 2 things at once;

  • migrate incentives
  • add USDC/USDT to the stableswap category

Which are 2 quite different things I think with different outcomes. So maybe good to split it to comply with our own preferences stated long ago ^^

With the topics itself Iā€™m ok. What is the main advantage of having a Supercharged pool in the stableswap curve? Is it purely to be consistent with prop #377 or does it yield significant benefits?

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We are doing the same 2 things with other migration proposals, this is less intense though as it does not include a bootstrapping provision - rather the new incentives model includes some basic bootstrapping by default

The wording is indeed just to remain compliant with the incentives structure in prop #377

Yeah, I just looked back and the other migration proposals were more or less also multiple requests in one proposal, but tightly consistent :sweat_smile:

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How is that USDC and not axlUSDC?

Cause Osmosis currently refers the axlUSDC as USDC as the canonical version, but canonical USDT has been moved to the Kava version, so axlUSDT is listed as such :slight_smile:

There will be an almost identical proposal when native USDC is live

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Is there any sight on native USDC getting closer from your point of view?

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