I have what may be a stupid idea. After looking at Pickle.finance earlier, it occurred to me that maybe Mesa or DXswap could be useful tools to help achieve peg stability. My understanding of pickle is that it plans to use flashloans and pvaults (maybe like yVaults?) to take advantage of arbitrage opportunities and return the profits back to Pickle holders. Rewards (both inflation and revenue) are directed to the pools with off peg stablecoins
The ring trades in the gnosis.protocol seem to be a good candidate for this. And it seems this is kind of what was intended with the original stablecoin incentives on gnosis. https://www.reddit.com/r/gnosisPM/comments/gqxml1/gnosis_will_distribute_1k_gno_to_stablecoin/
I’m not sure how much liquidity that attracted, but I didn’t hear much about it so probably less than pickle.finance. So what are the differences here? Is what pickle have created a fundamentally better way to maintain a peg that only they can do? Unclear but probably not. But they have memes and some really juicy APYs.
the dxDAO has access to Mesa and DXswap, and I know there has been talk of a Curve clone. The thing about most of these products is they are relatively opinionless when it comes to peg stability. If a peg breaks, the pools don’t care, they just follow their formulas. A layer above is needed to be opinionated about peg health. Right now there are fragmented systems to maintain pegs that are mostly insular (MakerDAO governors, SNX team, Circle, etc). The dxDAO could become a tool that stablecoin issuers use to cooperatively maintain their pegs. It is a known entity and has a good reputation.
If dxDAO is interested in active participation into other DeFi protocols, what better way to approach teams than with a proposition to help them. They could be partners in giving rewards to users who help maintain the pegs. With Mesa, users decide what stablecoins they want to add to the pools. But could the dxDAO create a pool of these groupings and set up all the parameters to do the arb trades on a larger scale? DXD could be used as a bridge pair if you wanted to use DXswap, but this seems like added friction.
I’m not sure if this is silly or if I am just describing something Curve already does better, but hoping there could be something here. I guess I’m thinking it’s more of a curve/gnosis protocol mashup with optimized stablecoin ring trades. Probably much easier said than done, right?
Would love to hear if people think this is a good or bad idea.