Fellow Hydrators,
With HOLLAR trading about 90 bps under peg and the HSM buyback inventory spent
(as described in refs #452 and #453), there is an opportunity for a complementary
governance action that neither of those two referenda covers.
**Background**
Refs #452 and #453 address the demand side — #452 raises the HOLLAR borrow rate
from 4.5% to 5.5% APY to incentivise repayment, while #453 lowers the facilitator
bucket from 13M to 11M to cap new minting. Both are well-designed and I have
voted Aye on each.
However, the Omnipool protocol fee account still holds a pool of accumulated HOLLAR
from trading fees. This HOLLAR effectively sits on the sell side — it is protocol
income that has been earned but not yet deployed. While it sits idle, it adds
nothing to the peg and arguably weighs against it, because the market knows there
is un-deployed HOLLAR in protocol accounts.
**Current situation:**
- HOLLAR peg: ~91 bps under target (source: Omnipool spot, block ~16,926,000)
- HSM buyback inventory: spent (confirmed in #452 and #453 proposal text)
- Stable pools: weighted roughly 72/28 towards HOLLAR (#452 text)
- Omnipool protocol fee account: holds accumulated HOLLAR and mixed-token fees
that have not been swept since the last claim
- The `dispatchAsAaveManager` origin used by #452 and #453 cannot reach these
reserves — they sit in the Omnipool pallet account, which requires Root to move
**Proposed action:**
Sweep accumulated HOLLAR protocol fee reserves from the Omnipool fee account
into the HSM replenishment address. This converts idle sell-side HOLLAR into
active buy-side inventory, directly supporting the peg alongside #452 and #453.
**Why Root?**
The dispatcher pallet provides `dispatchAsAaveManager` (track 9) and
`dispatchAsTreasury` (track 5), but the Omnipool protocol fee account is a
pallet-level account managed by the Omnipool pallet itself. Moving reserves
from this account requires Root origin, same as ref #408 which returned idle
GDOT from stopped farms to the Treasury.
**Expected effect:**
- HSM buyback inventory receives a top-up from existing protocol income
- No new HOLLAR is minted — this uses fees already earned
- Buy pressure added to the stable pools from the HSM side
- Combined with #452 (rate) and #453 (cap), this gives the peg a three-pronged
recovery: demand incentive + supply cap + direct buy pressure
**Verification:**
I have tested the call on a chopsticks fork of the current chain state. The
HOLLAR transfers cleanly to the HSM address, no state inconsistencies, pool
spot p
rice unchanged. Happy to share the fork log if there is interest.
I would appreciate feedback before putting this to a Root referendum. If there
is support I will submit with a lookup proposal and note the preimage at
enactment.
Stay hydrated :)
Summary of a governance proposal for the Hydration community
Threshold
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