Discussion & initial proposal: Reserve asset onboarding process

Thank you all for your comments.

Re quant metrics (@diwu1989 @papa_raw): I agree that quant metrics are useful but I don’t think we should over interpret them, especially when relying on historical data. Just think about the LUNA price series pre-May '22. It has zero predictive power for what happened a week after. Similarly, liquidity/volume measures are often distorted because of incentive payments, making it hard to predict how persistent liquidity is when incentives run out.

I am fully in favour of running some quant analysis in the review stage of a proposal but I think it needs to be embedded in a bigger picture assessment of the asset’s ‘fundamentals’. I think @Tobi also spent quite some time thinking about risk metrics, would love to get his views.

It sounds like this is also in line with @Lavi’s thinking. Lavi, I would love to better understand your work with Prime Rating (will dm you). From what I’ve heard and read so far, it sounds like Prime Rating could be a great third-party reviewer in the onboarding process.

Re compensation (@papa_raw): Agreed. I think some type of cost-sharing mechanism between the proposer and the community would make sense to filter out low-quality proposals and to signal credibility and willingness to cooperate (skin in the game).

Re voting (@papa_raw): The forum poll is an interesting idea. Let me try to find out if/how it could work.

Re emergency powers (@papa_raw): I think in the onboarding process the emergency power is implicitly there through the moderator role. If it e.g. turns out that the asset implodes mid-proposal, the moderator would not proceed with the greenlight decision. Maybe this should be more explicit.

I agree that there should also be emergency powers to liquidate assets in special circumstances (similar to the liquidation mandate in the gift policy) but I think this should be covered outside the onboarding process.

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