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I really did view this as “testing the waters”. I have no issue expanding to other pools if this is successful. tfUSDT at a minimum would be worth adding.
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Well I don’t expect everyone to withdraw. I just want to improve availability without punishing holders in the event of a default. What should happen is that the price of tfUSDC will free float in the liquidity pool. So it will drop to say 1.03 and that will be the equilibrium between buys and sells, like bonds. The only way withdraws would be impossible is if tfUSDC goes to 0.
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Buying tfUSDC only improves liquidity through liquid exiting, See my other post on why liquid exiting is a problem.
4, 5, 6. Yes, this is a plan to jumpstart a long term liquidity market. AMMs have an issue where low liquidity is self-perpetuating. People don’t trade on it because the AMM is too small, so people don’t LP because the fees are too low. I have had thoughts on how the pools could profit from buying USDC at a discount and actually make this very profitable for holders, but want to do one step at a time.
I have considered adjusting liquid exit and the mirror idea is interesting, but
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If someone gets early information on a significant default, it won’t matter much. That person is going to pull out and leave everyone else with amplified losses.
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The best pricing signals are from the market, not formulas. To get good pricing data, we need a good secondary market. A high volume AMM could actually give us the on-chain data we need to develop more sophisticated pool management.