Proposal to Update Price Feed for DOLA/FraxPyUSD LP Markets on FiRM

FiRM
1

Summary

We propose updating the oracle price feed for the DOLA/FraxPyUSD LP markets on FiRM to a newly deployed price feed contract. This update addresses valuation inaccuracies due to the previous incorrect inclusion of the virtual price of the FraxpyUSD LP token in our price feed calculations. By removing the virtual price from the calculation, we ensure accurate and conservative pricing for our collateral asset.

Background

In September 2024, we integrated two distinct DOLA/FraxPyUSD LP markets on FiRM:

  1. DOLA/FraxPyUSD Convex LP Market
  2. DOLA/FraxPyUSD Yearn LP Market

These markets enable users to leverage their stable liquidity positions, enhancing capital efficiency and strengthening our partnership with Curve, Frax, pyUSD, Convex, and Yearn.

During a renewed technical review, our development team identified a small accounting error regarding the FRAXpyUSD LP’s virtual price that could potentially lead to a collateral mispricing in the distant future. The virtual price represents the accumulated fees and rewards within the LP token, causing its value to slowly appreciate over time. However, in this context, we propose adopting new price feed contracts that exclude the virtual price from the price feed calculations for the FraxpyUSD LP token.

Price Feed

  1. FraxPyUSD LP Price Feed
  • Contract Address: 0x791480e7a74a256a7d3468ac2f914a66472d8589
  • Functionality: Retrieves the USD price of the FraxPyUSD LP token by selecting the minimum price from its underlying assets (Frax and PayPal USD), without incorporating the virtual price from the Curve pool.
  1. DOLA/FraxPyUSD LP Price Feed
  1. DOLA/FraxPyUSD Yearn LP Price Feed

On-Chain Actions

  1. Set FiRM Oracle Price Feed for DOLA/FraxPyUSD Convex LP to newly deployed feed
  2. Set FiRM Oracle Price Feed for DOLA/FraxPyUSD Yearn LP to newly deployed feed