Proposal for the Termination of BUSD LM Campaigns
Background: The issuer of BUSD (Paxos) announced that it will terminate support for the stablecoin by February 2024. This is the result of an enforcement by the New York Department of Financial Services (NYDFS) and can be confirmed via this official statement.
Below is a short quote from it:
“BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024.” — Paxos
Implications: The Hydra DAO is currently funding a liquidity mining campaign for the USDC/BUSD liquidity pool on the Hydra DEX, with a monthly budget of 2,000 HYDRA.
Since the usage of BUSD has been declining for the past year and redeemability will be in question after February 2024, the following situation is presenting itself:
- Misplaced incentives on an asset that is unlikely to be used in the future
- Potential financial risk beyond the February deadline regarding the backing and convertability of the BUSD stablecoin
Solution: The proposed solution is to terminate the liquidity mining campaign for the USDC/BUSD pool, which would also reduce the monthly DAO expenditure by 2,000 HYDRA per month.
Timing: Since the existing liquidity mining campaigns will expire on December 16th, it would be the perfect time to implement this proposal by not extenting the USDC/BUSD campaign.
Summary of Proposal:
- Termination of the liquidity mining campaign for the USDC/BUSD pool on the Hydra DEX
- Window of opportunity to expire it on December 16th