“It is I, C-3PO! You probably do not recognize me because of the red arm…”
We would like to share an exciting change we are making to the Conic Omnipool design that deviates from our whitepaper.
In our current design outlined in the whitepaper, rebalances are done by users being able to swap LP Tokens. Giving LP Tokens to the Omnipool that it is under-allocated in relative to the target, and in turn receiving an equivalent value of LP tokens that it is over-allocated in. While this system works, we have found during implementation and testing that it is rather verbose and could benefit from a simpler design.
Instead what we will be using is an incentivised and passive rebalancing system based on deposits and withdrawals from the Omnipools. When a user deposits into an Omnipool it will always go to the least allocated Curve Pool, and when a user withdraws it will come from the most over-allocated Curve Pool. This means that with regular deposits and withdrawals the pool will maintain a balanced state.
To incentivise regular deposits and withdrawals, we will be giving out CNC emissions to users who deposit into Omnipools while the pools are imbalanced. The CNC received will be based on the amount deposited, and will also increase over time while a pool is imbalanced, and will stop when the pool is balanced again.
This is a much simpler and easier to understand system for users, while having a nice benefit of sharing CNC distribution to users who deposit into Omnipools, instead of just users who are swapping LP Tokens.
Another benefit with this approach, is that rebalances do not incur a loss for the pool. With the old design, because of minor inaccuracies in the pricing of LP Tokens, we could expect a small loss to the pool with each rebalance. Which would limit how often we were able to do governance votes for rebalances. With this new design, we can rebalance more often.
Thanks to this change we can boost the governance power of vlCNC and allow for more frequent voting of Omnipool liquidity allocation weights
We’re excited to be in the last stretch for Omnipools and are looking forward to bringing these to you soon