Summary: Depositing into and withdrawing from pools is expensive, especially with recent rises in both gas prices and ETH price. This represents a direct barrier to entry for funds looking to allocate into Rari strategy pools. In this proposal, I will suggest a few paths we can take to address this, and hopefully one will be adopted.
Background: Deposit and withdrawal gas fees have become super high lately in both ETH and USD terms ($60 to deposit at the time of writing). This can mostly be attributed to rises in gas and eth prices, but there are things that Rari can do to improve despite these external factors. At the end of the day, the more it costs to deposit and withdraw from pools, the less capital Rari will attract. I would consider this a crucial issue, and together with @teddy_swits we have a few suggested solutions to discuss.
Abstract:
These solutions are as follows:
1) Incentivize liquidity for REPT-ETH, RSPT-USDC and RYPT-USDC pairs as part of RIP-1 and RIP-2. Although this does nothing to address the underlying issue, it does allow end users to enter and exit pools without interacting with Rari smart contracts. Creating liquid markets for these tokens would also allow Rari to position itself as a base trading pair asset for Layer 2 exchanges like Loopring. On these exchanges, funds must be sent and locked on Layer 1 Ethereum before they can be used on the L2 network. The basic pitch to LPs on these networks would be that they can either use and trade the unyielding underlying assets (ETH, USDC, soon wBTC), or they can use yielding Rari pool tokens. The goal would be to have most pools trade against REPT and RSPT and use underlying assets only for onramp and offramp purposes. (Ask me to clarify if any of this does not make sense!) (RYPT would likely not be part of that push for LPs since it has a higher risk profile than RSPT with similar yields.)
2) Divert a portion of Rari pool funds to a staging pool to act as onramp/offramp for funds. When a user deposits or withdraws, funds would go into/out of this staging area. The staging pool would deposit or withdraw from the pool it is connected to any time it falls above/below preset thresholds. I believe this would greatly optimize gas efficiency, although I'd love to hear thoughts from the devs on its efficacy. A great suggestion from @teddy_swits is to put in place an RGT staking threshold above which deposits, withdraws, and transfers between pools would be free. I think if the gas cost of a system like this was low enough, this would be viable by overcharging unstaked users for gas (who would still likely pay less than everyone today) to offset staked users that do not pay. It's possible that this could even result in a profit to the protocol.
3) The team has mentioned that they are working on an automated rebalancer system for pools. This could be applicable to the situation, and I'd welcome more comment from them about this (with respect to the unannounced nature of that system. It's ok if you guys are vague about it).
4) Do nothing, pray gas prices come down or eth crashes.
Motivation: To make it as easy and inexpensive as possible to deploy funds into Rari strategy pools.
Vote Options:
A) Incentivize liquidity for REPT-ETH, RSPT-USDC and (maybe) RYPT-USDC pools. Focus on onboarding funds via pool token trading instead of direct deposits/withdrawals with the protocol.
B) Creating a staging pool system to batch deposits and withdrawals from pools and decrease gas costs per user.
C) Option B plus free deposits and withdrawals given user has staked X RGT.
D) Address the issue with a rebalancer system.
E) All of the above.
F) Let them eat cake.
P.S. We can add more options before an actual vote if there's demand for a combination of these options not listed above.
