Add functionality to allow depooling of UST pools via emergency upgrade hard fork in proposal #225
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Add functionality to allow depooling via emergency upgrade hard fork in proposal #225\n \n Because UST is IBC-native and because bridges to other stablecoins have just now going up, UST has been the predominant stablecoin on Osmosis. UST LP providers thought they were LP'ing with a stablecoin, and now they are facing significant further depeg risk. This proposal seeks to mitigate the IL loss due to the rapid depeg.\n \n UST pools have had unforeseen volatility and due to sigificant full depeg risk, Osmosis users should have a chance to avoid further potential impermanent loss. This proposal gives liquidity providers in these pools the option to take an action to unpool their liquidity in these UST pools if they wish. Unpooling would be a new message action an LP can take on these pools if they were bonded before the emergency proposal time. Unpooling on a 14 day bond will be the equivalent of exiting the pool, and then beginning a 14 day unlock for the constituent assets. This has the affect of confirming any impermanent loss, and will safeguard one half of their remaining liquidity tokens in the event of an asset in the pair going to zero.\n \n Furthermore, by reducing the liqudity between OSMO and UST, it makes the UST->OSMO->ATOM a less liquid exit liquidity path for UST, helping reduce OSMO price impact during further UST depegs.\n \n Governance should be very cautious with this, as its a significant change to Osmosis and may set a dangerous precedent. The change is concerning on multiple fronts, including the fairness to other LP's, using a hard fork for something thats arguably a market design problem, and what is to be expected in the next crash.\n \n Because this process requires a software upgrade and is extremely time sensitive, we propose adding the execution of this to the same mechanism proposed in proposal #225. Namely, once 2/3 of total chain voting power approves proposal #225, if within a short time period, 2/3 of total chain voting power also approves this proposal, then this signals the approval for validators to include functionality enabling depooling in the emergency hard fork.\n \n The list of pools affected is:\n #560 (UST/OSMO)\n #562 (UST/LUNA)\n #567 (UST/EEUR)\n #578 (UST/XKI)\n #592 (UST/BTSG)\n #610 (UST/CMDX)\n #612 (UST/XPRT)\n #615 (UST/LUM)\n #642 (UST/UMEE)\n #679 (4Pool)\n \n Note: This Proposal will consider to be passed based on 67% of governance voting Yes and failed based on 33% voting No and so will be eligible for action when this threshold has passed rather than at the end of the voting period.
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