ARC-59: Reduce ampLUNA-LUNA stableswap amplification parameter to 2


This proposal reduces the amplification factor of the ampLUNA-LUNA stableswap pool on Terra to 2 from 10.


Due to the high APY and high exchange rate of ampLUNA, the ampLUNA-LUNA stableswap pool has gottent highly unbalanced. While this does not have an impact on the trade price, it has an impact on liquidity providers receiving less yield, and traders having higher slippage due to trading at the edge of the stableswap pool curve.

To reduce the impact and make the pool more balanced, it is proposed to reduce the amplification factor to 2 over the period of ~1 week. This is an intermediate meassure until the meta stable pool is available and liquidity can be migrated to the new pool type.

Even though the pool is balanced, the current assets are 18896 ampLUNA (worth 21919 LUNA) : 54646 LUNA. We expect this to get worse every day.

An amp factor of 1 would make the pool behave like a constant product pool.

Executable Message

The executable message associated with this proposal looks as follows:

    "wasm": {
      "execute": {
        "contract_addr": "terra1cr8dg06sh343hh4xzn3gxd3ayetsjtet7q5gp4kfrewul2kql8sqvhaey4",
        "msg": "ewogICJ1cGRhdGVfY29uZmlnIjogewogICAgInBhcmFtcyI6ICJld29nSUNKemRHRnlkRjlqYUdGdVoybHVaMTloYlhBaU9pQjdDaUFnSUNBaWJtVjRkRjloYlhBaU9pQXlMQW9nSUNBZ0ltNWxlSFJmWVcxd1gzUnBiV1VpT2lBeE5qZzFPRE0yT0RBd0NpQWdmUXA5IgogIH0KfQ==",
        "funds": []

The readable version of this message looks as follows:

  "update_config": {
    "params": "ewogICJzdGFydF9jaGFuZ2luZ19hbXAiOiB7CiAgICAibmV4dF9hbXAiOiAyLAogICAgIm5leHRfYW1wX3RpbWUiOiAxNjg1ODM2ODAwCiAgfQp9"

And the readable version of the params property looks like this:

  "start_changing_amp": {
    "next_amp": 2,
    "next_amp_time": 1685836800


Posted in forum: 2023-05-14
Posted on chain: 2023-05-21
Executed on chain: ~2023-05-28
Change AMP to 2 until: ~2023-06-04 12:00 AM UTC (unix epoch time in seconds: 1685836800)


Copyright and related rights waived via CC0.


A prudent move. Fully support.

I don’t have the exact number, but since ampLUNA has been live for about a year, 1 ampLUNA should equal about 1.14 LUNA. Quite diverged.

Since bLUNA and stLUNA were launched much later, they haven’t diverged as much from LUNA. Right now, 1 stLUNA = 1.042 LUNA.

For this reason, I think it would be appropriate for the bLUNA and stLUNA pools to stay at amp_factor 10 until metastable is ready.