HIP-22: Create a zUSD — USDC Pool on Pancakeswap V3
We’re proposing HIP-22 to enhance zUSD liquidity by establishing a concentrated zUSD — USDC pool on Pancakeswap V3 and sunsetting incentives for Wombat Exchange. By partnering with Cupcake Hop (ICHI) as the position manager, this proposal represents a shift toward protocol-owned liquidity, enhancing long-term sustainability and efficiency.
Key Points:
- Transition to Pancakeswap V3: Protocol-owned liquidity will be seeded with 20k USDC (from the Pyth airdrop) and an equivalent amount of minted zUSD from the Community Staking Wallet.
- Automated Position Management: Cupcake Hop (ICHI) and Cakepie will manage the zUSD — USDC V3 pool.
- End Incentives on Wombat Pools: Redirecting resources to the new PancakeSwap V3 pool for optimized zUSD stability.
Purpose and Rationale
The current Wombat pools haven’t performed as expected, impacting the zUSD peg. Concentrated liquidity on Pancakeswap V3 allows more efficient on/off-ramping for zUSD with less capital, while Cupcake Hop’s management will help maintain liquidity in optimal ranges.
Considerations
- Temporary peg fluctuations may occur during the transition.
- Users on Pancakeswap, Cakepie, and Cupcake Hop should consider standard DeFi risks (smart contract, front-end).
Read the full details in our Academy and join the discussion with your questions and feedback.
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