Compensation of TIA/USDC Dynamic A+ Vault Users

Summary

This governance proposal outlines the plan to provide compensation to users of the TIA/USDC Dynamic A+ Vault who experienced a suboptimal performance in the fourth quarter of 2023.

Background:

Quasar launched the TIA/USDC Dynamic Aggressive+ vault on the Quasar platform on October 31, 2023. This quickly became a popular choice among users, highlighting its attractiveness and the innovative approach to LPing solutions provided by Quasar.

Following its launch, the TIA/USDC Dynamic Aggressive+ vault significantly contributed to the liquidity of the underlying Osmosis pool. However, this substantial influx of liquidity presented challenges. The vault’s predominant position within the pool restricted its ability to adjust its range efficiently, an issue attributed to its considerable size relative to the total liquidity available in the Osmosis pool. Due to these constraints and a high volatility and the vault’s inability to rebalance, some users of the vault experienced impermanent loss, which the vault actualized when swapping into USDC.

The nature of Aggressive+ vaults inherently carries a higher risk of impermanent loss, as these are designed to target higher yields. This aspect is further accentuated by the BETA designation on CL vaults, signifying their status as preliminary and subject to potential adjustments based on performance and user feedback.

Despite there being no legal obligations, the Quasar Association asks formally to compensate users with this proposal.

Compensation Process and Amount

Following the challenges encountered with the TIA/USDC Dynamic Aggressive+ vault, the Quasar Association took proactive steps to address the concerns of its user base. Recognizing the need for a structured approach to evaluate a potential compensation, Quasar released a form on the Quasar application gathering detailed information from individuals who were invested in the vault before the end of the same quarter as of the end of December.

Understanding the importance of inclusivity and ensuring that all potentially impacted users had the opportunity to come forward, Quasar reopened the submission form multiple times even after the official deadline has passed. This approach was publicly communicated, catering to users who may have missed the initial deadlines, thereby reaffirming Quasar’s commitment to transparency and user support.

Quasar then undertook a comprehensive review and analysis of the information provided by the users.

As a result of this evaluation, it was determined that a total of 69 users in the form of Osmosis addresses met the criteria for compensation. These identified wallets are set to receive a cumulative compensation amounting to 22,561.91 USDC.

The compensation amount will be taken from the Quasar Association reserves.

Voting

• By voting YES, you agree to the changes above proposal suggests.

• By voting NO, you disagree with the changes above proposal suggests.

• By voting ABSTAIN, you express no opinion on the matter.

• A No With Veto vote indicates a proposal either (1) is deemed to be spam, i.e., irrelevant to Quasar, (2) disproportionately infringes on minority interests, or (3) violates or encourages violation of the rules of engagement as currently set out by Quasar governance.