[Proposal] 17: User Defined Coupon Expiry w/ FPSBA

[cinquemb]

Summary

• implements EIP-14 but using a FPSBA kind of blind auction with the spirit of the coupon auction outlined in v2

Description

An auction is initiated for every epoch, during that epoch people may place bids -> {how much they want to pay, max coupons they want to buy, the epoch they want coupon to expire}. Bids that exceed the max coupon to token ratio are rejected immediately. Tokens that are in the wallets at the time of bidding, but not by the time of settlement are ignored and not filled.

At the end of the epoch:

• if TWAP > 1, the auction is canceled, coupons are auto-redeemed in order of placement in prior auctions that were successfully settled (i.e first place winners in each auction first, then second place, etc until redemption pool is empty). Rate of expansion is determined by prior auction internals (inverse of avg of the avg yields of the individual auctions that still have non expired coupons in them, this will allow for market driven dynamics to determine the rate of token growth), not by hard-coding in the protocol.

• if TWAP < 1, the auction is settled and coupons assigned in order and tracked on chain within an auction based on min euclidean distance of yield and expiry (i.e. the person that submitted the smallest yield, smallest expiry gets filled first and the most amount of esd they are willing to burn) until all are filled, the next auction is created.

Tests have been implemented for coupon bid and auction settlement (auto-redemption tests are in progress). Thanks to everyone for helping me flesh this out in the discord conversations.

Tracking

Status: Pre-proposal
Implementation:

[MastaBook]

[MastaBook]

[manymoneymanny]

• if TWAP < 1, the auction is settled and coupons assigned based on min euclidean distance of yield and expiry (i.e. the person that submitted the smallest yield and smallest expiry gets filled first) until debt is erased, the rest of the bids get rejected and auction is markets as finished. the next auction is created.

I'd change this minimum Euclidean distance. Shorter expiry is riskier, therefore it has first priority (probability of getting paid after expiry is 0 with 100% confidence). Thereafter, ties should be sorted by the lowest premium.

I understand this would totally change this proposal. Still, think it is worth pointing it out.

[cinquemb]

I'd change this minimum Euclidean distance. Shorter expiry is riskier, therefore it has first priority (probability of getting paid after expiry is 0 with 100% confidence). Thereafter, ties should be sorted by the lowest premium.

I understand this would totally change this proposal. Still, think it is worth pointing it out.

I was trying avoid sorting twice and it was simpler for me to weight the importance of both lowest yield and lowest expiry equally. Feel free to implement that sorting algo.

[MastaBook]

))

[MastaBook]

[DaveyQuint]

Is there also a web 3 provider?

[DaveyQuint]

And is it possible for 0?

[DaveyQuint]

Wauw....very good work! Thnx for all your effort...and also quick! Can we maybe test if it works properly ?