SIP-3: Increase Pool Amplification Coefficients

Summary

Increase Amplification Coefficient in several pools

Abstract

This SIP would increase the Amplification Coefficient (“A parameter”) for the alETH, BTCV2, D4, and usdV2 pools linearly over the two weeks following this SIP being passed.

Motivation

The higher a pool’s Amplification Coefficient is, the wider the range of no-or-low-slippage trades is. Lower slippage implies more competitive rates and thus more volume, which benefits both LPs and the protocol.

These pools meet the requirements of having relatively high TVLs and a well-balanced (close to perfectly evenly distributed) asset composition.

Specification

Overview

We propose increasing pool amplification coefficients according to the following table:

Pool TVL ($) Current A Proposed A
alETH 77M 120 240
BTCV2 42M 200 400
D4 50M 120 240
usdV2 15M 200 400

Note: The Amplification Coefficient can only be increased up to 2x per transaction (enforced by contract code), and each increase will occur linearly over at least two weeks.

Rationale

Well-balanced and high-TVL pools should always move towards a higher A parameter. We anticipate regularly creating “A-update” proposals like this one to ensure that Saddle continues to offer competitive, low-slippage swap rates.

For:

Increase the amplification coefficients of Saddle Pools in accordance with the table above over a period of ~2 weeks.

Against:

No change

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