The Protocol should allocate up to $20,000 USD from its treasury to sponsor TWAP updates for the next year.
The Protocol relies on Dutch Auctions where FLOAT is purchased or sold by the Protocol to provide the opportunity for arbitrageurs to participate in returning the market price of FLOAT to the target price. The cost of starting an Auction can impact potential profits for arbitrageurs, swaying them away from doing so, thus leaving FLOAT arbitrage opportunities on the table. This also means that potential burns and mints of BANK by the Float Protocol Auction house become delayed. A major part of the cost of starting the Dutch Auction is updating the TWAP for the FLOAT/ETH and BANK/ETH price. This is usually a cost of ~$10 USD to update each TWAP required, and occurs at minimum every 12 hours. So in total we’d expect this to cost <$15,000 for the next year. One would suggest allocating up to $20,000 dollars (the additional buffer to cater for gas spikes) to sponsor TWAP updates over the year.
The Protocol should allocate up to $20,000.00 USD from its treasury to sponsor TWAP updates for the next year.