Summary
This proposal seeks approval to grant Equinox an instant unlock feature for its locked vxASTRO. Equinox’s model requires flexible access to its vxASTRO position to distribute the difference between the incremental value of xASTRO’s price appreciation vs. ASTRO. vxASTRO does not have any partial unlocks due to wanting to keep the model simple, making permissioned instant unlocks the only method to achieve this.
Use Case
Equinox’s model requires flexible access to its vxASTRO position to distribute the difference between the incremental value of xASTRO’s price appreciation vs. ASTRO and the current eclipASTRO supply to the three components below.
- Upcoming Stability Vault: Supports the peg of eclipASTRO by giving users the option to redeem eclipASTRO for ASTRO immediately minus a fee. Prior to the stability vault’s launch, the xASTRO accumulated in this smart contract will be controlled by the stability vault DAO and can be utilised to buyback eclipASTRO to support the peg if necessary.
- Treasury DAO for ECLIP Buybacks: Facilitates buybacks of ECLIP to bolster the token’s value.
- Treasury DAO for ASTRO Holdings: Grows Eclipse’s ASTRO holdings, increasing Equinox’s vxASTRO voting power, supporting future protocol stability and growth.
The current 14-day unlock schedule does not support “partial unlocks,” requiring the entire vxASTRO position to be unlocked to access xASTRO for these allocations. This constraint would prevent Eclipse from participating in critical voting epochs, which are crucial for attracting liquidity providers (LPs) and maintaining the eclipASTRO peg. Additionally, during the 14-day unlock, the smart contract is prevented from increasing its vxASTRO deposits, which would halt the ability for new eclipASTRO to be minted as each time an eclipASTRO is minted, the xASTRO used to mint it is automatically locked. Instant unlocking would allow Eclipse to partially distribute assets as needed without losing vxASTRO voting power and keep the eclipASTRO minting process and the Equinox platform functional.
Benefits
Allowing instant unlocks will have several positive effects:
- Ensures Protocol Stability: Enables Eclipse to maintain a steady backing for eclipASTRO and support the peg effectively.
- Maintains Voting Participation: Avoids forfeiting voting rights during unlock periods, preserving Equinox’s influence within the Astroport ecosystem.
- Supports Bribe Market Functionality: Prevents disruption to the upcoming bribe market, ensuring bribes contribute to active voting power rather than being ineffective.
- Increases Locked vxASTRO: Each time eclipASTRO is minted, xASTRO is locked by Equinox, reducing the circulating supply of ASTRO. Without instant unlocking, this process would be halted.
Conclusion
Following thorough discussions with the Astroport team, we determined that enabling instant unlock for Equinox contracts offers the best solution for both protocols. Alternatives, such as allowing partial unlocks or preserving voting rights during the unlock period, were deemed unworkable due to technical limitations. Granting instant unlock will allow Eclipse to continue minting eclipASTRO and maintaining the required xASTRO locks without interruption.
Addressing Community Concerns
Astroport users may worry that instant unlock could lead Equinox to rapidly unlock and sell its xASTRO holdings, impacting the ecosystem. However, Equinox’s protocol model requires a 1:1 backing for each minted eclipASTRO, ensuring that xASTRO will always be held in reserves. The platform has no incentive to unlock and liquidate its entire xASTRO position, as doing so would undermine its stability and peg.
This proposal ultimately strengthens Eclipse’s ability to support Astroport while safeguarding the interests of both protocols.