Proposal to Migrate zkBob Polygon Pool From BOB to USDC

zkBob
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Dear zkBob Community Members and Users,

We’re reaching out today with a significant proposal that we believe could greatly enhance the zkBob protocol and make it more user-friendly. As we continue to strive for improvement and user satisfaction, we want to ensure we move forward with transparency and community involvement. We invite your valuable thoughts and feedback on the idea presented in this post.

So far, the protocol has deployed two BOB pools, one on Polygon and one on Optimism. However, after conducting extensive user feedback sessions, we understand that many of our users would prefer to use a widely adopted stablecoin over BOB when interacting with zkBob. The main reason is the convenience it offers—using e.g. USDC removes the need for additional swaps, thus making the process more streamlined and efficient. Recognizing this, and understanding that zkBob is in active beta, we are considering migrating the Polygon BOB pool to USDC and converting all the liquidity in the pool from BOB to USDC. This would occur automatically on behalf of all users in the pool, not only for convenience but also to reduce any issues manual migration might introduce for users.

This means that if you made a BOB deposit into the BOB zkBob pool on Polygon, contract address: 0x72e6b59d4a90ab232e55d4bb7ed2dd17494d62fb, the tokens will be automatically converted to USDC. There won’t be any manual user input needed to trigger the conversion. Until the migration happens you can withdraw BOB stablecoin at anytime from the pool, and once the migration is finished you will be able to withdraw USDC from the pool where 1 BOB = 1 USDC. Currently, there is no proposed date for the migration and we aim to keep the whole process as transparent as possible. We will inform you of any updates on our official social media channels on Twitter, Discord, and Telegram.

We are also actively researching and working on deploying more non-BOB pools on Optimism, Polygon, Ethereum mainnet, and other popular EVM chains. The outcome of this proposal is not directly tied to these efforts and we aim to launch additional pools, mostly for ETH on Ethereum mainnet and Optimism, regardless of the decision made here.

There are several implications related to this proposal. On one hand, it will simplify the transaction process for many users, leading to a better user experience overall. We also believe that this change can positively impact the size of the pool, attract more liquidity and increase the anonymity set, thus making the protocol much more usable for users and 3rd party DApps alike. It can also encourage more developers to integrate zkBob into their applications as it will remove the barrier created by requiring BOB usage. On the other hand, the protocol will lose some flexibility as it will become more dependent on a third-party token. However, we believe that the benefits outweigh the drawbacks in this scenario, particularly given zkBob’s strong focus on compliance and safety.

That said, it’s crucial to reiterate that no decision has been made yet. We believe in the strength of our community and the value of your perspectives. Therefore, we want to gather as much input as possible before any decisions are made.

We invite all community members and zkBob users to join this conversation. What are your thoughts on migrating from BOB to USDC? How would this impact your use of the zkBob protocol? Are there any specific concerns or considerations you think we should address?

We’re looking forward to your responses, and we assure you that each comment will be considered carefully. This is an important decision that will shape the future of zkBob, and we want to make it with you.

Thank you for your continuous support and commitment to zkBob. Together, we can make the best decisions for the protocol and its users.

Best Regards,
The zkBob Team

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What does this mean for BOB itself?

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imho this weights much more than the possible benefits. Instead of replacing $Bob with $USDC I would prefer to diversify the backing.
What will remain the usecase for $Bob if this proposal is be implemented?

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If implemented, this proposal would affect only the zkBob BOB pool on Polygon. So it won’t affect zkBob BOB pool on Optimism, 3rd party BOB LP positions, or BOB CDP. It also doesn’t mean that more BOB pools on different chains won’t be deployed in the future.

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imho this weights much more than the possible benefits.

We are streamlining the processes when it comes to deploying more zkBob pools on different chains for different tokens, currently mainly focusing on USDC and ETH and ETH mainnet, Optimism, and Polygon networks. We are also exploring more KYC options for the protocol apart from already implemented kyCAT and more specific use cases and possible 3rd party integrations. From the feedback that we have seen over the last few months, either from possible partners or users it is clear that BOB is creating a barrier and might be limiting the growth potential for zkBob - we want to address this.
As is already said, this doesn’t impact BOB on other chains or BOB pool on Optimism or doesn’t mean that there won’t be more BOB zkBob pools. This intends to increase opportunities for zkBob; creating a bigger anonymity set - making the protocol more usable, make it easier to integrate zkBob into different workflows, and remove the mental barrier in the users minds.

Instead of replacing $Bob with $USDC I would prefer to diversify the backing.

That already happened in a way by launching BOB CDP and more emphasis might be put on this aspect in the future if there is such demand and use cases for BOB.

What will remain the usecase for $Bob if this proposal is be implemented?

You can use it in zkBob. You can use it for everyday payments like any other stablecoin, you can use it in various 3rd party DeFi DApp, you can use it in BOB CDP, you can use it in BobSwap, and possibly more in the future.

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does this also holds true for polygon? Can I still use $Bob inside zkBOB besides USDC? If so I wouldn’t mind to proceed with this.
Regarding all the other opportunities to use $Bob: these are fine but for me the main feature that distinguishes Bob from other tokens/stables is the use inside zkBOB and I doubt that zkBOB will gain much more traction if you remove this.

edit: but ofc it might be a nice study to see how usage of $BOB will evolve on polygon compared to optimism if zkBOB there will remain $BOB exclusive.

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does this also holds true for polygon? Can I still use $Bob inside zkBOB besides USDC? If so I wouldn’t mind to proceed with this.

If this proposal is implemented in its current form then you wouldn’t be able to.

I doubt that zkBOB will gain much more traction if you remove this.

The feedback, mostly coming from hundreds IRL conversations on 10+ different events in the last 6 months, is rather the opposite. People perceive the BOB as a barrier to actively use the DApp.

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agree, I meant $Bob token, not zkBOB. for zkBOB usage it might really be good.

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$USDC implemetation would benefit the protocol a lot. I’m looking to hear more about the future of $BOB

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Based on the overwhelmingly positive feedback regarding the proposal, the protocol governance has decided to implement the migration proposal.

The actual migration of the pool from $BOB to $USDC is scheduled for Monday, July 17, 2023. We will provide an update with the exact time once it is determined.

If you prefer your funds not to be part of the auto-conversion process, please withdraw your $BOB from the zkBob privacy pool on Polygon by Monday, July 17. If you withdraw by this date, you will receive $BOB. If you withdraw after the migration, you will receive $USDC instead.

For FAQs and additional details about the migration, visit: USDC Pool on Polygon - zkBob

If you have any questions about the migration, feel free to reach out to us on our official Telegram or Discord channels: zkbob | Twitter | Linktree.