I’m a bit worried about the parameters that governance has to set. Particularly, the gauge stake total feels so hard to get right, and even harder at launch.
Basically, it seems that the gauge stake total should be similar to the total amount of pool that is staked across the different gauges. If this value is higher than that, prizes will be more infrequent, of it’s lower, prizes will be more frequent.
Obviously, this has to be according to the prize distribution. If the prize distribution is distributing double the amount of prizes compared to what it’s being generated, then it intuitively makes sense that the gauge stake total should be double the amount of the total POOL staked in all the gauges.
The problem is that if a large amount of POOL is staked or unstaked in a short period of time, the calculations done to get a proper prize distribution will be in vain. This can lead to 2 different scenarios:
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The protocol distributes less prizes than expected if a big amount of POOL is staked. If this goes to an extreme, it can lead to people withdrawing their deposits because of low yields. Fortunately, people withdrawing will actually increase the expected yield and balance everything (avoiding an huge loss of TVL).
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The protocol distributes more prizes than expected if s big amount of POOL is unstaked. Although this scenario should help attract more TVL because of the higher prices, this would come at a cost to the treasury or the POOL token sell pressure (depending on the asset we choose to distribute).
I feel that our governance should act really quickly in these scenarios, which is something that with the current possibilities feels hard to do.
Should we have an emergency committee? (Kind of like the one that Curve protocol has). I don’t know if that’s necessary, but it’s something to think about.