Summary

This proposal requests an increase to the minimum gauge staking width (minWidth) for the ynRWAx / USDC Hermes gauge on Arbitrum. Raising the minimum position width ensures consistent baseline incentives and supports sustained TVL growth for ynRWAx on Arbitrum.

This change reduces volatility in incentive allocation, improves asset price stability, and should help Arbitrum become the primary liquidity venue for ynRWAx.

Background & Context

The ynRWAx gauge was approved and successfully deployed to bootstrap liquidity for YieldNest’s RWA MAX product. Early results demonstrate strong Hermes incentive efficiency and gradual adoption.

Increasing the minWidth of the ynRWAx gauge optimizes for asset price staility and serves as an incentive for Total Value Locked growth by reducing the maximum liquidity concentration for LPs.

The recent depeg due to the end of ynRWAx incentives on XDC network has lead to a depeg that demands more wide liquidity.

Strategic Alignment

• Positions Arbitrum as the canonical liquidity hub for ynRWAx.
• Supports the ongoing liquidity campaign's TVL goals.

Proposed Change

• Gauge: ynRWAx / USDC
• Chain: Arbitrum
• Action: Increase the minimum gauge weight (minWidth) from 1 to 20.

Governance Details

This proposal will follow the standard Hermes governance process:

Temperature Check (3 days)

• Forum discussion and community feedback

On-Chain Vote (3 days)

• Formal token-holder vote

Execution Queue (2 days)

• Mandatory delay prior to execution

Upon successful execution, the updated minWidth will take effect immediately in the next gauge cycle.

Risks & Considerations

• Reduces the maximum APR a position can earn (one tick positions aren't allowed)
• Offset by improved TVL stability, higher liquidity quality, and stronger long-term returns for the ecosystem

Conclusion

Increasing the minimum gauge weight for ynRWAx is a targeted, low-risk improvement that strengthens liquidity guarantees, maximizes Arbitrum TVL, and aligns Hermes with a high-quality RWA growth strategy. This proposal builds on the success of the original gauge approval.