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Protect the Peg!

Rationale and Benefits behind DWPs

StableSwap algorithms are cool, but Staking Derivatives are not bound to result in a price ratio of "1". In fact, this ratio is expected to keep increasing over time thanks to staking rewards.

Instant Withdrawals

Thanks to Liquidity Providers, stakers are able to realize their withdrawal without any waiting period.

Better Derivative Health and Staking Price

With the mechanism of finalizing the withdrawal happening in buyback&burn, Liquidity Pool defines the health of a staking pool.

Geode Portal routes users to the Dynamic Withdraw Pool instead of minting new tokens if there is a better price, resulted by depeg event. Thus making sure that the market is healing itself while providing a better price to stakers.

Continuous Liquidity

When Telescope updates the price of a given gAVAX token (there are many different IDs), the pricing algorithm changes to fulfill the new price. That means, any withdrawal request will result within an accurate price range.

Boosted Incentives

One additional benefit of DWP is to mathematically incentivize gAVAX holders to hold onto their staking derivative in the result of a depeg event.

When a depeg happens, a Staking Pool's activeNodeOperator is expected to buyback&burn the staking derivative, to repeg the pool.
This creates an arbitrague, captured by the staking pool itself.
As the tokens are burned, the arbitrague yield is distributed to the current token holders automatically at the next Oracle update!

Boosted Peg Protection

If there is a severe depeg event, resulting in a negative pricing on the DWP, the Pool maintainers cannot get their fees until it is resolved.

Asset Security

It is much safer to have a dynamic peg in place with staking derivatives than any other asset pair. This is because Geode Portal has limitations in place for Oracle manipulations. Learn more about Telescope here:
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Rationale and Benefits behind DWPs
Instant Withdrawals
Better Derivative Health and Staking Price
Continuous Liquidity
Boosted Incentives
Boosted Peg Protection
Asset Security