TLDR:

• Exchequer is arbitraging DLLR in profit and reducing buying of DLLR
• Reduction in SOV rewards for the DLLR pool has been proposed
• The new SIP was approved, allowing for borrowing and lending of DLLR, and enabling margin trading
• Stability pool will have SOV rewards, generating more demand for holding DLLR
• Differences between the stability pool, AMM pool, and lending pool in terms of risk profile and yield
• SOV incentives will be given to early providers of liquidity to the borrowing pools in the lending pool

The fourth Zero/DLLR meeting of the Sovryn community was held recently, and it covered several important topics related to the Sovryn ecosystem. Here are the key takeaways from the meeting:

Exchequer’s DLLR Arbitrage 

The Exchequer is currently arbitraging DLLR in profit by buying it when its value is less than $1 and selling it for Bitcoin when the price goes above $1. However, it is reducing its buying of DLLR at present.

Reduction in SOV Rewards 

A reduction in SOV rewards for the DLLR pool has been proposed, as seen in the recent reduction in SOV/RBTC and RBTC/XUSD. This is aimed at reducing the emissions of the SOV token to control its inflation.

Current total emission stands at: 49.5k weekly SOV

New SIP Approved 

The new Sovryn Improvement Proposal (SIP) was approved, enabling borrowing and lending of DLLR and allowing for margin trading. Users will be able to deposit DLLR as collateral to borrow RBTC and Bpro, and vice versa. This will open up new opportunities for users to earn yield on DLLR through shorting and lending.

Stability Pool 

Within the next 2–3 weeks, SOV rewards will be introduced to the stability pool, which is already very profitable. This could drive more demand for holding DLLR and provide gains to providers, while also offering a level of stability to the Zero protocol.

There are a couple of articles being published about the effectiveness of the stability pool, we will bring you the key takeaways from them in our next issue of the Sovryn Chronicles.

Differences between the Stability Pool, AMM Pool, and Lending Pool 

The stability pool and AMM pool have different risk profiles, with the former having two assets and the latter only one. The yield in the AMM pool is also more stable, in SOV tokens, while the yield on the stability pool is uneven and depends on market conditions. The stability pool pays directly in RBTC.

The lending pool is attractive for people looking to earn yield on dollar-denominated assets without being subject to impermanent loss .

Sovryn will now have different ways for people to profit from their holdings, depending on their risk tolerance, time preference, etc.

Lending Pool 

Liquidity should be allowed to accumulate in the lending pools before margin trading is enabled to DLLR. SOV incentives could be given to early providers of liquidity to the borrowing pools, as there can’t be borrowers without lenders. SOV incentives to bootstrap the cycle could be a good idea.

In order to prevent further inflation of the SOV token, these incentives might be coupled with SOV reductions in the AMM pools. 

Call to the Community 

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Remember to Stay Sovryn.

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