IIP-45: Delegation of FLI parameter changes

iip: 45 title: Delegation of FLI parameter changes status: Draft author: @overanalyser created: 2021-05-22

Simple Summary

To delegate FLI parameter management to a small team of subject matter experts from DeFi Pulse, Set Labs, and the Index Coop community.

Abstract

Identify a small work team representing the methodologist (DeFi Pulse), engineering (Set Labs) and Index Coop contributors who will be given the authority to make changes to FLI product parameters.

In order to maintain complete transparency and accountability to the community, all changes must be posted to the forum 24 hours in advance of the change being made.

The team may make emergency changes (implemented immediately after posting on the forum), in the event of an emergency change, a new IIP will be required to document the emergency and to reaffirm the communities support of the FLI working groups actions.

This delegation of responsibility will expire on the 31st July 2021.

Motivation

There are a number of FLI parameters that can be modified by the manager contract including:

  • Supply cap

  • Max trade size

  • Rebalancing exchange venue

  • Slippage tolerance during rebalances

These parameters allow new FLI products to be introduced to the market in a controlled way, and their behaviour modified as we observe them in action. More details on the strategy behind FLI parameter updates can be found here.

Until now, FLI parameter changes have been controlled by the IIP process. This process has resulted in many IIP’s and it introduces a significant delay between the identification of a need and its actual implementation. Examples include:

  • IIP-20: increase supply cap for ETH2x-FLI from 50,000 to 100,000 units

  • IIP-23: increase supply cap for ETH2x-FLI from 100,000 to 200,000 units

  • IIP-30: increase supply cap for ETH2x-FLI from 200,000 to 400,000 units

  • IIP-37: Tighten window and increase recentering on BTC2-FLI

  • IIP-42: Raise supply cap on ETH2x-FLI from 400,000 to 600,000 units

  • IIP-44: Raise supply cap on BTC2x-FLI from 200,000 to 400,000 units

Because the majority of Coop members do not consider themselves FLI experts, many members defer to the IIP proposer / blindly vote yes. As a result, the current IIP process is effectively one of delegation to subject matter experts but with additional friction.

The motivation is to allow the subject matter experts to manage FLI products in a more frictionless way and to allow more rapid, responsive changes to product parameters.

Specification

The FLI work team will be comprised of individuals within three sub groups:

  • DeFi Pulse: @snasps @Jo_K

  • Set Laboratories: @puniaviision @setoshi @richard

  • Index Coop Community: @allan.g @afromac @emault

The process will be:

  1. The FLI work team will discuss and identify parameter change requirements.

  2. One member of the FLI work team will post a short description of the reasoning for the change to the forum (a poll is not required).

  3. Other members of the FLI work team should comment on the forum post to indicate that they support the change.

    • A minimum of at least 1 individual from each sub group (i.e. Set, DeFi Pulse, Index Coop) must post their support for the change.

  4. At least 24 hours notice in the forum without any dissent from a Coop community member (DeFi Pulse, Set employees, or Gold, Silver, or Bronze Owls from the Index Coop Community)

  5. The change can then be made once these criteria are met.

In scope parameters include:

  • Supply cap

  • Max trade size

  • Rebalancing exchange venue

  • Slippage tolerance during rebalances

Out of scope parameters include:

  • Changes to the bot whitelist parameter (e.g. IIP-39)

  • Fees of the product

This delegation will expire on the 31st July 2021.

IIP vote specification:

FOR

  • Create a FLI work team and delegate parameter control to the specified individuals

AGAINST

  • No change; continue managing FLI product parameters via IIP process