Proposal to add DOLA/swanUSD to the Gauge Controller
Summary
Proposal to add the Ethereum DOLA/swanUSD pool to the Curve Gauge Controller.
References / Useful links
Protocol Description
Minting, redemptions and staking
swanUSD is a dollar stablecoin issued through Monolith, a lending protocol developed by Inverse Finance. Borrowers deposit wstETH to mint swanUSD. They can choose interest-free debt that holders can redeem against or pay a variable rate to keep their positions outside the redemption process.
When a holder redeems against a free-debt position, the lender burns their swanUSD, reduces the borrower’s debt and pays out wstETH at its oracle value, less the redemption fee. This exit is limited by how much debt borrowers have made redeemable. Monolith redemptions
Holders can deposit swanUSD into the sSwanUSD vault to earn a share of borrower interest. A separate staking contract pays SWAN rewards to sSwanUSD stakers. How swanUSD works
Peg Stability Module
The PSM gives users a second way to mint swanUSD. Users deposit USDS and receive newly minted swanUSD without opening a loan. The PSM holds the USDS in Sky’s sUSDS savings vault. In the other direction, it burns swanUSD and returns USDS one-for-one, up to the available reserve. Monolith PSM documentation
Monolith’s rate controller counts both the PSM reserve and redeemable debt when measuring exit capacity. If that measure falls below its target range, the variable borrowing rate rises over time, encouraging borrowers to repay or switch to free debt. Interest rate controller
swanUSD liquidity on Curve
The swanUSD/USDC StableSwap-NG pool launched alongside swanUSD on 22 October. It provides a market for swapping swanUSD against USDC. Its exponential moving average, combined with Chainlink’s USDC/USD feed, is the market-price input for FiRM’s swanUSD/USD feed. swanUSD/USDC pool
As of 6 November, the swanUSD/USDC pool held about $80.7k in liquidity at par, split between 39,470 USDC and 41,263 swanUSD. The pool traded about $16.0k in the preceding 24 hours and $134.0k over seven days, measured on the USDC side of each swap. The PSM had 1,398,755 USDS available for swanUSD exits.
When swanUSD trades above par on Curve, arbitrageurs can mint it through the PSM and sell it into the USDC pool. When it trades below par, they can buy it on Curve and sell it to the PSM for USDS while reserves are available. Both trades depend on the spread covering their costs.
Motivation
Adding the DOLA/swanUSD gauge lets veCRV holders direct CRV emissions to the pool. Inverse DAO and SWAN DAO will co-incentivize it to build a direct DOLA exit. If swanUSD trades cheaper in the USDC pool, traders can buy it there and sell it into the DOLA pool even when the PSM reserve is depleted. That gives the pool used for the price feed another source of arbitrage.
We plan to add the gauge-staked DOLA/swanUSD LP as collateral on FiRM through a separate Inverse DAO proposal. LPs would be able to borrow DOLA at a fixed rate against the same position that earns swap fees and gauge rewards. They could also put borrowed DOLA back into the pool to increase their LP position.
The 100,000 SWAN launch airdrop includes eligible veCRV holders and qualifying Convex, Yearn and Stake DAO positions from the 19 October snapshot. Eligible addresses qualify by holding at least 1,000 sSwanUSD, directly or in the SWAN rewards contract, for seven consecutive days by 19 November 2026 at 16:00 UTC. The latest start is 12 November at 16:00 UTC. Check eligibility and terms.
Specifications
- Governance. Staked SWAN holders govern SWAN DAO through an onchain Governor and timelock. The Inverse Treasury Working Group Safe can adjust bounded parameters on the swanUSD lender, including its interest-rate and redemption settings.
- Oracles. The Monolith lender values wstETH with a wstETH/USD oracle. The planned FiRM LP feed uses Curve virtual price and the shared swanUSD/USD feed. Its market-price input comes from the separate swanUSD/USDC pool.
- Audits. Electisec and ChainSecurity audited the Monolith core, which also went through a Sherlock contest. The SWAN DAO governance and rewards contracts went through a separate Sherlock bounty contest and AI-assisted reviews. Monolith audit reports · SWAN DAO risk assessment
- Centralization vectors. The lender’s main tuning permissions expire at its immutability deadline. SWAN DAO retains authority to change the share of borrower interest routed to its Revenue Router. The gauge manager can configure external rewards.
- Market History. swanUSD launched on 22 October 2026. The DOLA/swanUSD pool was deployed on 4 November with A of 250 and a 1 bp base swap fee. swanUSD has held $1 peg since deployment
