Current: Rebase will occur for MIC holders (both naked MIC, LP) formula of rebase 1/x MIC V1 : 1 MIC V2 where X = 6H TWAP of MIC V1 USDT price, preceding conversion time. Migration would also require removing of LP, and re entering LP.
Issue: LP holders will "realize" impermanent loss. Exit and re-entering results in temporary liquidity crunch.
Resolution: - Allow for direct LP migration: Sushiswap MIC-USDT pool LP holders can migrate directly into Curve metapool MIC-USDT LP. - Reward direct LP migration if subject to lock: For LP providers that migrate directly, a choice is given: You can choose to migrate with lock, or without lock. If you choose to migrate with lock, a MIC V2 reward will be provided to complete conversion ratio of 1:1. Reward calculation: Reward amount (in MICv2) => In case where 1/x is > 1, <<amount of MIC V2 received during conversion * (1/x - 1)>>, where X = 6H TWAP of MIC preceding conversion time. In case where 1/x is <1, no reward, no lock up option
Example: If twap of MICv1 during conversion is $0.2, and 100 MICv1 is converted, then you would receive 20 MICv2 at time of conversion, and receive rewards of:
<<amount of MIC V2 received during conversion * (1/x - 1)>> 20*(1/0.2-1) => 80 MICv2 as rewards
Completed conversion ratio => 100 MICv1 : (20 + 80) MICv2 => 1:1
Distribution period: 40% after 1st month, 1st month lock up. After 1st month, 10% weekly epoch. If LP is withdrawn during unlock phase, undistributed reward is burnt. 10 weeks fully distributed.
Strength of proposal: - Rewards liquidity before - Rewards liquidity after - Rewards liquidity migration