ETH2x-FLI Parameter Update #9

Product Products
1

Update:

Changed to reflect the fact that the Trade Splitter update is defined in the smart contract as a new exchange “AMMSplitter”

Simple Summary

IIP-50 enables the addition of new exchange “AMMSplitter” that is able to combine rebalancing trades over Uniswap V2 and Sushiswap. To prepare for the update we suggest setting a combined Max Trade Size of 900 and a Ripcord Max Trade Size of 3000.

Abstract

Define the following parameters for ETH2x-FLI:

  1. AMMSplitter Max Trade Size: 900
  2. AMMSplitter Ripcord Max Trade Size: 3000

Motivation

Following the implementation of the Trade Router upgrade detailed in IIP-50, ETH2x-FLI is now able to rebalance on Uniswap v3 and benefits from improved liquidity condition available there, as detailed in Parameter Update #8. An additional upgrade enabling FLI products to split rebalancing transactions over multiple DEXs will go live this week. Splitting these rebalancing trades over both Sushiswap and Uniswap V2 enable us to target a lower price impact and safe delevering speed.

Use a projection of a 30% increase in price and 800,000 FLI tokens supplied, we are able to target a price impact of 1% and a combined delevering speed of 0.03 across both DEXs, using the parameters detailed in the abstract.

For more information on delevering speed please refer to Parameter Update #7 & Update #8

Context

As per IIP-45: Delegation of FLI Parameter Changes 1 1, management of FLI product parameters has been delegated to a small team of subject matter experts from DeFi Pulse, Set Labs, and the Index Coop community in order to enable more rapid, responsive changes to product parameters.

The FLI work team is comprised of individuals from three sub-groups:

The process for updating FLI parameters is as follows:

  1. The FLI work team discusses and identifies parameter change requirements via discord / calls etc.
  2. Member(s) of the FLI work team will post a short description of the reasoning for the change to the forum and state that the FLI work team is in agreement; no poll is required
  3. The forum post must be active for 24 hours and have no dissent from FLI work team members
  4. The change(s) can then be made once these criteria are met
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