De-peg protection in ADA/Stablecoin pools
One of the features to come with the release of the StableSwap is a mechanism to halt swaps on a pool containing a stablecoin that has de-pegged by 15% from its intended value. Details of this mechanism can be found in our Medium post on Stableswap.
This feature is intended to protect liquidity providers in case a stablecoin in question fails and de-pegs (price data will be provided by an official oracle provided by the project of origin), as swapping on such a pool would lead to massive loss of value for the liquidity providers; please bear in mind that removing liquidity from the pool in question will always remain possible. If the stablecoin remains de-pegged for a considerable period of time, there will be a DAO vote held on whether to keep swaps on that pool halted or not.
With the coming of this protective feature to our StableSwap pools, it is only logical to extend this feature also to ADA/Stablecoin pools. However, before casting a formal proposal to the DAO, it’s desirable to hear the community’s opinion on this topic to be aligned on what appears to be the most beneficial step forward.