Call to Prayer #18

Call to Prayer #18 occurred on Sunday May 29, 2022 at 6:00pm EST. For a tl;dr, you may check out this Twitter thread. Click here for the Chinese translation.

STAX Recap

STAX will be launching soon with what we're calling v0.1, or the "pre-release." It will have a relatively minimal feature set for now including:

  • Templars will finally be able to add liquidity to the TEMPLE/FRAX LP through a front-end UI.
  • You will also be able to convert your LP token into a mirrored asset called xLP (similar concept to CRV conversion to cvxCRV).

When you convert your LP token to xLP, it's a one-way process and STAX will stake those LP tokens on your behalf. You then stake the xLP token to receive the yield you are entitled to, with the benefit that those tokens are liquid (you don't need to leave them locked for the entire locking period to receive yield).

When you're ready to withdraw your liquidity, you take your xLP and swap it for the original native LP token on Curve.

There will be more in the full release of STAX V1.0 to come later, with extra features like FXS conversion, staking of the STAX token itself, etc.

Why STAX?

Temple is very close to the FRAX ecosystem and Sam, and we're keen to promote them. The original idea was to create something like Convex in the FRAX ecosystem, where we give boosted yields to FXS and LP stakers and then some STAX tokens as rewards.

However, we wanted something that would distinguish TempleDAO and STAX from the rest of the industry, so we're offering a unique "liquidity service." Usually, when you stake on the FRAX gauge, you're not allowed to withdraw until the time lock is over (the longest lock and highest yield is three years). STAX will enable you to receive the same yield of a 3-year lock on the FRAX gauge with liquid tokens and can be exchanged at any time. This will be the most aggressive strategy to boost yields currently available in the FRAX ecosystem.

How will you defend xLP/LP peg and how much you're willing to spend on it, particularly when temple trades above backing?

The xLP/LP peg will act like an AMO. i.e., when xLP is above peg (more of it than the LP), the contract will take the native LP token and buy it from the curve pool. And the amount of native LP token that gets retained will dynamically adjust people's deposit to ensure that we can support the peg pretty tightly. Regarding how much we're willing to spend on it, we will have to monitor that I can't give you a firm answer. As more TVL locks into STAX, the curve pool will grow proportionally. And basically, what we're hoping to see is the peg maintain itself.

How does this work for non-temple liquid pairs?

At launch, we're only going to support xLP/LP for the simple pair. As we go on, if it makes sense, we will add more pairs to STAX.

Can you share info on fees?

For this launch of STAX v0.1, there will be no fees on the rewards. The fees taken by the platform should only be a fraction of what is given out to users of the platform.

Is xLP/LP curve stable pair parameters or volatile pair?

We are exploring different curve dynamics. But v0.1 will be a curve stable swap. There will be some calibration optimizations because the more "stable" we make the pair, the tighter the peg will be but then also the faster the peg will crash should it move outside of the level that the pair can support.

Will it stay perfectly 1:1 all the time? No.

If there's a discounted buying opportunity, would Temple make sense to buy it and push the price back up? Yes.

We want to create a sustainable mechanics system that can give people ongoing exit liquidity at a close one-to-one level.

Right now, people aren't even willing to buy sub-RFV Temple, so we need to build trust for this stuff to work unless you're going to use the treasury to promise a defended peg

Trust is just as important as always. As the product's launch (Temple CORE vaults, STAX, governance), I think it will make a big difference for people to see a sustainable, exciting product here.

Is there any update on a hard price-based success metric for the three vault cycles timeline?

What we discussed on this one was that there are two elements to success. One is price, and the other is incremental yield above what can be earned by a user.

In my opinion (and we are accelerating the DAO governance release because this should not be beholden to one person's opinion…), the above measures are how we can gauge the long-term value of this protocol for templars.

If holding $TEMPLE to get value from its price and incremental yield delivers more value than just distributing the treasury, then it makes sense to keep the product alive. We will evaluate this after three vault cycles have run their course.

If you use STAX to lock up the LP, and we decide to defend backing, all that FRAX is now trapped, so what happens?

Worst case scenario if we were to wind down the Temple protocol and there is locked LP FRAX as the contract owner can unlock a gauge. So in this scenario, I imagine that they would unlock it for us.

Can you enter vaults without Temple, i.e., zapping in with other assets?

On launch, you will be able to enter with TEMPLE, TEMPLE + FAITH, and OGTEMPLE.

Will the FAITH ratio be announced pre-launch or at launch?

We will have a dedicated medium article on this topic that will come out before the CORE vaults release. We will also have a walkthrough video that will take you through the entire CORE vault interface.