However, we currently have a lot of extra capacity for the 8x AVs. Given the repurchasing mechanics, we are also less constrained by the vault’s size limit compared to when we were using the rebalance system.
By removing xALPACA holding requirement to invest in high-leveraged AVs, we will remove a barrier to entry and attract more demand and capital to the vaults.
This will be beneficial to the protocol and xALPACA holders from higher the resulting higher revenue.
The extra capacity already demonstrated that there is currently not enough demand from existing xALPACA holders to invest in these vaults, so it makes sense to open up the vault to the larger audiences.
We will remove the xALPACA holding requirements to invest in high-leveraged AVs, allowing anyone to invest into the vaults.
Yes I believe it’s a good idea to look at how we can attract more capital now that the AVs have been optimised.
What’s going through my mind is whether there are different ways to execute this? (without reinventing the wheel)
Could it make sense to do this in phases?…for example, by going down to 1:2 ratio first for 3 months and see whether we fill them up more. The hypothesis here is that existing investor might use them more, but don’t have enough allowance from their xAlpaca
Ramp down or Ramp up?…would it be better to progressively lower the barrier to entry down to 0 or to have a promotional period where there’s no barrier and then increase it?
There are other things I’d ask to consider please:
Can we implement this with a 3-month test and learn period? Last time we voted it became hard to change because it was positioned as a definitive vote. Here I think we need to observe and then reassess after a while
Can we think of what data/metrics we can collect and analyse to assess the impact of this manouver? For example, things like “avg net inflow pre/post implementation” or “whether the inflow is coming from new investors or people with money in governance (using wallet IDs)” etc