Executive summary
This proposal seeks DAO permission to refund all protocol fees to the users of Boost for the period of July 14-20th, totaling 8.4899465 osETH.
The intention of the refund is to soothe the profitability of Boost during the period of extraordinarily high borrow rates on Aave.
The refund would apply to Boost users in all Vaults, and would be distributed via the Merkle Distributor, allowing each user to claim it when convenient through the StakeWise UI.
Should this proposal fail, the team will have used own funds to process the refund.
Motivation
ETH price just went on an impressive run and while it’s incredible to see the recovery, there are some second-order effects that our users have experienced.
The ETH borrow rate on Aave has spiked as some depositors withdrew ETH from the platform for whatever reason (adding margin / selling ETH etc), making Boost APY volatile, and even unprofitable on some days.
We expect this to clear up within days as the market adjusts itself and significant looped staking positions in other protocols are unwound.
However, as a courtesy to Boost users, we are putting forward the DAO initiative to refund all protocol fees to stakers in Boost, starting from July 14th, until July 20th.
This initiative should lead to a surplus of up to 0.15% APY per loop, or up to 2.1% APY total for Boost users. While it falls short of the negative APYs experienced on some days, it is nevertheless real money that goes back to wallets.
The refund is already available as a fast action from the team. Should the DAO support the decision to refund, the full amount (8.4899465 osETH) would be refunded to the team’s wallet from the DAO Treasury.
Considerations
There are arguments to be made on both sides for whether a refund is the right thing to do. As originators of the proposal, we believe that a protocol fee refund would signal DAO’s commitment to giving our best in every product we release and invite users to use.
Vote
SWISE holders - please signal your support or opposition to this proposal via the Snapshot vote: https://snapshot.box/#/s:stakewise.eth/proposal/0x18b1dba0e309ab7be8507561f14ae11787d7ff2c5f06ae41ea724150129efaa8