Prop 186: milkTIA Redemption Rate Update - Osmosis Outpost

mrc: 94 title: milkTIA Redemption Rate Update - Osmosis Outpost authors: dancreee forum-url: https://forum.marsprotocol.io/t/1281

Summary

The objective of this proposal is to update the redemption rate contract used by the milkTIA asset on Mars Protocol.

Motivation

The existing MilkyWay redemption rate oracle contract deployed on Osmosis is actually returning a purchase rate, the inverse of the redemption rate for milkTIA (denom factory/osmo1f5vfcph2dvfeqcqkhetwv75fda69z7e5c2dldm3kvgj23crkv6wqcn47a0/umilkTIA). As a result the custom composite oracle for milkTIA which uses a min(milkTIA/TIA TWAP, milkTIA/TIA RR) was returning a progressively lower value than that of the spot value of milkTIA.

e.g. purchase rate = 1 TIA = 0.956089860127365362 milkTIA redemption rate = 1 milkTIA = 1.04592679172100534 TIA

The new Milkyway Oracle contract correctly returns the redemption rate ratio from the redemption rate query.

While this has not had a large impact on Mars Protocol users - milkTIA has just been consistently trading at slightly below spot value, Mars Protocol contributors are looking for an expedited upgrade to this new contract as there are additionally some licensing issues surrounding the previous redemption rate contract which was a fork of the Stride ica-oracle contract holding the BSL licence.

Risks

Because this is a newly developed and deployed smart contract there is risk of bugs and vulnerabilities. However as a mitigation Mars contributors have conducted an internal review of the contract and have concluded it as satisfactory.

Implementation

This is a signaling proposal, not an executable proposal.

The Mars smart contracts on the Osmosis chain are currently controlled by the Builder Multisig address. If this proposal passes, the builders will utilize their multisig to make the necessary parameter changes.

Copyright

Copyright and related rights waived via CC0.

Disclaimers/Disclosures

I am a contributor to Mars Protocol