SCCP 21: Widen iSynth Price Bands Source

AuthorKain Warwick
Discussions-ToSIPS-WIPS
StatusProposed
Created2020-05-05

Simple Summary

The original price bands chosen for the iSynths have proven to be a poor trade-off between tracking the underlying price and frequency of hitting price limits.

Abstract

The current upper and lower price bands for iSynths are set at 1.5x the underlying and .5x the underlying. This SCCP proposes to change the price bands to 1.75x and .25x to align with the change to the iETH price bands implemented in SCCP-17.

Motivation

The current price bands cause the iSynths to be frozen regularly which has a significant impact on their usability. By increasing the price bands the iSynths will freeze less frequently. The trade-off is that the amount of leverage at the upper and lower bounds increases from 4x to 7x at the upper limit of the underlying and from 1/2 to 1/7th at the lower bound.

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