Expedited Proposal to Rebalance Vaults

Summary

● On November 15, the dYdX community approved routing 50% of protocol fees to the MegaVault. To date, DEP has allocated $1,523,102.00 USDC to market-specific subvaults under the designated grant.
● This proposal seeks to optimize the performance of the dYdX Chain vaults by deploying additional available capital and adjusting the parameters of each subvault to align with the specific characteristics of their respective markets.
● This proposal is time-sensitive, as the rebalances rely on current equity levels in the MegaVault and its subvaults, which are subject to fluctuations over time. If the equity in any subvault drops below the levels required for the proposed rebalances, the entire proposal may be rendered ineffective.
● To ensure that these optimizations can be executed based on the current vault conditions, we intend to submit an expedited proposal for an on-chain vote as soon as possible.

Motivation/Rationale

The dYdX Unlimited upgrade introduced support for the MegaVault—a user-facing feature designed to allow dYdX Chain users to deposit USDC, provide liquidity to various markets, and earn yield.

Under this grant, DEP deposited $1,523,102.00 capital into market-specific subvaults to facilitate testing and bootstrapping. Currently, there is no Megavault Operator on dYdX Chain and as a result any changes to subvault parameters must be completed through a dYdX Chain governance proposal.

This proposal aims to change vault allocations, deploy more capital in the Megavault, and to set the spread and skew parameters for select vaults. We will monitor subvault performance and may need to submit another proposal early next week.

Specification

Vaults will be updated as follows:

pair half_spread_change new_skew_change transfer
ZRO-USD 0.003 -0.5 -1712.6955
PEPE-USD 0.003 -0.5 59300.6579
TRY-USD 0 0 -37744.409
MOTHER-USD 0 0 -30419.845
TREMP-USD 0 0 -17859.453
SNX-USD 0 0 -11499.202
1INCH-USD 0 0 -7615.7577
POPCAT-USD 0 0 -7128.1809
AR-USD 0 0 -5425.5725
BTC-USD 0 0 -4318.6276
ENS-USD 0 0 -4249.3934
MEW-USD 0 0 -4062.2563
ENJ-USD 0 0 -4048.0045
FOXY-USD 0 0 -3813.1186
ETH-USD 0 0 -3717.7995
TAIKO-USD 0 0 -3516.1647
MNT-USD 0 0 -3491.8718
DMAIL-USD 0 0 -3420.9654
AXS-USD 0 0 -3383.4451
OM-USD 0 0 -3213.5244
RETARDIO-USD 0 0 -3209.8745
BICO-USD 0 0 -3197.506
STRK-USD 0 0 -3170.3524
PIXEL-USD 0 0 -3159.745
CVX-USD 0 0 -3152.8664
EIGEN-USD 0 0 -3113.9792
ZEN-USD 0 0 -3094.4346
TRX-USD 0 0 -3077.8731
DAI-USD 0 0 -3075.1496
STX-USD 0 0 -3047.4369
ZERO-USD 0 0 -3042.428
IMX-USD 0 0 -3019.4934
CORE-USD 0 0 -2983.5475
GME-USD 0 0 -2959.6702
XAI-USD 0 0 -2929.6294
EGLD-USD 0 0 -2929.2814
NEO-USD 0 0 -2889.5652
UMA-USD 0 0 -2825.1443
OSMO-USD 0 0 -2816.0179
ZK-USD 0 0 -2805.2489
ALT-USD 0 0 -2766.9346
EURC-USD 0 0 -2754.1352
BLAST-USD 0 0 -2598.2574
JTO-USD 0 0 -2328.7913
ORDI-USD 0 0 -2246.9287
TLOS-USD 0 0 -2095.675
ARKM-USD 0 0 -2026.0659
FLOKI-USD 0 0 -1932.9976
TON-USD 0 0 -1892.8431
DRIFT-USD 0 0 -1848.0492
WOO-USD 0 0 -1693.3708
VRTX-USD 0 0 -1592.3248
AURORA-USD 0 0 -1568.018
NOT-USD 0 0 -1531.5645
BLUR-USD 0 0 -1426.442
XTZ-USD 0 0 -1357.0859
GMX-USD 0 0 -1264.7339
PENDLE-USD 0 0 -1246.35
BODEN-USD 0 0 -1115.8995
AKT-USD 0 0 -1100.7746
ASTR-USD 0 0 -1059.2707
PYTH-USD 0 0 -927.07487
JUP-USD 0 0 -861.93808
SAFE-USD 0 0 -831.88219
NEIRO-USD 0 0 -702.69554
PEOPLE-USD 0 0 -676.62458
W-USD 0 0 122.776982
MOG-USD 0 0 144.596679
ETHFI-USD 0 0 204.439898
AEVO-USD 0 0 1168.66967
DEGEN-USD 0 0 2155.12689
ALGO-USD 0 0 2400.4241
AXL-USD 0 0 2874.69518
APT-USD 0 0 3269.66995
TAO-USD 0 0 5578.88438
GRT-USD 0 0 5890.86254
ENA-USD 0 0 12460.4506
MANA-USD 0 0 12966.1111
SEI-USD 0 0 24889.2711
BONK-USD 0 0 26798.0821
CHZ-USD 0 0 31909.3226
FTM-USD 0 0 40540.922
RENDER-USD 0 0 49047.8444
TIA-USD 0 0 66593.5309
SHIB-USD 0 0 68024.8359
RUNE-USD 0 0 70712.8391
UNI-USD 0 0 71444.4519
SUI-USD 0 0 72149.6941
WLD-USD 0 0 72711.2228
DOGE-USD 0 0 76170.3365
MICHI-USD -0.003 0.5 -22275.533
XMR-USD -0.0015 0.5 0
DYM-USD 0 0.5 -334.73457
WIF-USD 0 0.5 11424.4598
HBAR-USD 0 0.5 20511.9724

Next Steps

We intend to submit an expedited proposal for an on-chain vote as soon as possible.

why did we have Expedited proposal for Megavault fee sharing in the first place when nothing was ready?

Vault conditions have fluctuated since our previous proposal, prompting changes to balances and parameters. We will submit a new expedited proposal to address these updates. We expect this to be our final manual update, with an Operator assignment proposal to follow shortly.

We support the expedited update, and also encourage the creation of an Operator function to increase efficiency in the future.
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