Comptrollers and AMO Decentralization

Authors

samkazemian.eth

Discussion thread: https://gov.frax.finance/t/fip-6-protocol-decentralization-comptrollers/43/5

Summary

Allow for Comptroller addresses (currently the core team) to control monetary policy within FRAX peg bounds of 1.01 - .99 and create public recollateralize() & decollateralize() functions for all AMOs outside of the peg bounds so that all protocol functions are fully trustless above/below the peg.

Motivation

The protocol should require no trust assumptions by any delegates or whitelisted keys outside of the peg bounds. Within the peg bounds, delegated/whitelisted accounts can conduct monetary policy expeditiously so long as the FRAX price peg is within bounds. Additionally, we’d propose adding timelocks to certain functions such as adding/removing AMOs even if the price is within the peg bounds.

We propose that within the peg’s bounds, delegated addresses should be afforded privileges to conduct monetary policy such as rebalancing AMOs, updating the CR by 1 tick (currently set to .25%) per t period (t =1 hour), and other monetary policy. These delegates are called “Comptrollers of the Currency” and currently only the core team. They can be added/removed by timelocked FIP-style governance vote. Currently, only the team has any privileges, but others can be added in the future that join the core team or are prominent community members.

If adopted, this proposal seeks to:

Add public decollateralize() & recollateralize() functions to all future AMO deployments that can be called by any user outside of the peg bounds to restore the FRAX peg trustlessly.

Allow for “Comptrollers” to conduct monetary policy as long as the FRAX peg remains in the bounds 1.01 - .99 as defined by the Uniswap FRAX-USDC & FRAX3CRV TWAPs (and future FRAX-USD Chainlink oracle). Outside of peg bounds, all CR updates, AMO recollateralize() & decollateralize() functions are callable by anyone.