Summary:
Hey Rari Community! Derrick from Liquity here. The goal of this proposal is to create an LUSD Fuse Pool along with FEI, FRAX, DAI, and USDC.
We’d like the Rari Capital DAO to manage this pool
Background:
Liquity is a decentralized borrowing protocol that allows users to draw interest-free loans against ETH as collateral. Loans are paid out in LUSD (a USD-pegged stablecoin) and need to maintain a minimum collateral ratio of 110%. Loans are secured by the Stability Pool, where users can deposit LUSD and provide up-front capital to offset uncollateralized debt. In return, they receive ETH collateral when liquidations occur and continuous LQTY rewards (our secondary token).
Liquity is also governance-free and immutable with no admin keys. All operations are algorithmic and fully automated, and protocol parameters to maintain system health were set at time of contract deployment.
Resources:
Website
Documentation
Dune Analytics
Twitter
Discord
Blog
Audits:
Trail of Bits Security Assessment - January 2021
Coinspect - March 2021
Trail of Bits Liquity Protocol and Stability Pool Final Report - March 2021
Trail of Bits Liquity Proxy Contracts Report - March 2021
Contracts:
LUSD Token Address: 0x5f98805a4e8be255a32880fdec7f6728c6568ba0
Chainlink LUSD Price Feed: 0x3D7aE7E594f2f2091Ad8798313450130d0Aba3a0
Initial pool parameters:
Upgradeable: Yes
Close Factor: 0.5
Liquidation Incentive: 8%
LUSD Collateral Factor / Reserve Factor: 75% / 10%
FEI Collateral Factor / Reserve Factor: 75% / 10%
FRAX Collateral Factor / Reserve Factor: 75% / 10%
DAI Collateral Factor / Reserve Factor: 75% / 10%
USDC Collateral Factor / Reserve Factor: 75% / 10%
Motivation:
Currently, LUSD is not available for lending and borrowing on other money-markets. This creates a unique opportunity for Rari to be among the first, if not the first, to support LUSD.
~$500M of the LUSD supply is in the Stability Pool, some of which Rari can capture and increase TVL. This is especially likely considering Rari usually boasts high APYs.
