We propose a project for the modeling and simulation for the USTC Incremental Repeg Buybacks & Staking Swaps proposal by Redline.
The project aims to enhance an existing tool, conduct rigorous analysis, and provide valuable insights into the algorithm's strengths and weaknesses. We seek support from the Terra Classic community to fund this impactful project.
We will be reproducing what the Market Module does off chain to make it easier to tweak the algorithm and iterate without the various blockchain constraints (eg. deployment, testnet, etc.).
We've rewritten the LUNC<>USTC market module in python, excluding all the parts inherent to Cosmos such as creating the tokens, managing protocol accounts, etc. This makes it easier and faster to model and test future solutions.
- Enhance the existing tool to accommodate the USTC Incremental Repeg Buybacks & Staking Swaps algorithm proposed by Redline.
- Conduct thorough modeling and simulation of the proposed algorithm to understand its behavior and potential impact on the Terra Classic ecosystem.
- Analyze simulation results to evaluate the algorithm's performance under different market conditions and stress tests.
- Identify and document the strengths and weaknesses of the algorithm, assessing its effectiveness and associated risks.
- Provide the community with comprehensive insights and recommendations based on our findings.
The project team will consist of four individuals who each bring a unique set of skills and expertise. Two senior Quants, one junior Quant, and two Quant Developers will work together to achieve the project's objectives:
- Faffy / ALex: Senior Quants
- Redline: Junior Quant
- Bilbo / Kyjack: Quant Dev
- Professor Ed: Free / open source contributor
The payment breakdown will be as follow:
- Redline / Bilbo / Kyjack will work part time for 3,000$ each per month (9000$ in total per month)
- Alex will work full time for 5,000$ per month
- Faffy will work full time for 6,000$ per month
- Total for this proposal (4 weeks): 222,222,222 LUNC
- There will be another proposal in 2 to 3 weeks to vote for the second months
Timeline and Milestones
- The project timeline will span two months, divided into the following milestones:
- Enhancing the existing tool to accommodate the USTC Incremental Repeg Buybacks & Staking Swaps algorithm.
- Conducting modeling and simulations, capturing the algorithm's behavior and performance.
- Analyzing simulation results, evaluating performance under various market scenarios, and identifying strengths and weaknesses.
- Producing a comprehensive report with recommendations for the LUNC community.
- An enhanced tool capable of accurately simulating the USTC Incremental Repeg Buybacks & Staking Swaps algorithm.
- Simulation results and analysis report, evaluating the algorithm's performance in different market conditions.
- Documentation of identified strengths and weaknesses, including risk assessment.
- Rolling out the necessary infrastructure and tools for any future Repeg proposal or new stable algo testing / evaluation.
- Vote YES to release 222,222,222 LUNC (20,000$) payment for the first month of work
- Vote NO otherwise
Link to the full proposal: https://commonwealth.im/terra-classic/discussion/11673-modeling-and-simulation-for-the-ustc-incremental-repeg-buybacks-staking-swaps-proposal-by-redline