Channel: Business Development
TL;DR: Create a Fuse Pool on Rari Capital, controlled by IndexCoop to create a money market for our own products.
We are proposing creating an IndexCoop controlled Rari Fuse Pool.
Initially, the Fuse Pool will contain the following assets:
The exact market parameters will be decided in conjunction with experts from Rari Capital and posted prior to a snapshot vote. Management of the fuse pool will be initially handled by Samuel Shadrach who leads fuse pool management for the Rari Capital team. The process will gradually be handed off to members of Index Coop.
Why Rari Fuse Pool:
Rari Fuse Pools will allow us to create money markets for our products and bring several key wins and abilities to both IndexCoop members and the IndexCoop DAO. A Fuse Pool is basically our own Compound-style market where the DAO will control which assets are listed, the interest models, collateral factors, etc.
Benefit 1: Operational and Investment Flexibility
The tokens in the pool are all assets held by our treasury. By enabling our operations account to borrow stables against our INDEX and DPI holdings we can avoid us having to sell at low INDEX prices, giving our treasury managers flexibility in how to manage our funds.
Additionally borrowing USDC against some of our INDEX holdings and placing them into a yield source such as Yearn (or even Rari’s Aggregator) would allow us to earn a return on our otherwise stagnant INDEX supply.
Lastly, our treasury earns DPI, MVI, and FLI from streaming fees. Instead of having these assets sit stagnant in the treasury, we will be able to supply these to the Fuse Pool to earn a yield until they are needed.
Benefit 2: Reduced Sell Pressure from Contributors
By providing a lending market for INDEX, contributors can now unlock the USD value of their earned INDEX without needing to sell their equity, reducing sell pressure and keeping our core contributors even further aligned with the project for the long haul.
Benefit 3: Added Extrinsic Productivity
We are providing our own venue for our products to gain extrinsic productivity. For some (MVI, INDEX, FLI) this will be the first time such an option has been available. High demand here could press other protocols (CREAM, AAVE, Compound) to list us.
Benefit 4: Alignment with a great partner DAO
The Rari team is excellent and well connected to many other DeFi projects. They are a DAO we have wanted to integrate with for a while. We have been holding off on doing a fuse pool integration until we found an angle that made sense to the Coop, and we feel this adds value to all stakeholders. This can be the first of several integrations between our DAOs. For example, we can use their yield aggregators as sources for IP down the line (or SYI should the methodologists deem appropriate).
Some KPIs to track success:
- Usage of the pools
- Decrease in the number of contributors dumping rewards immediately
- Return on stagnant DPI/MVI held in the pools
Smart Contract Risk:
Rari Capital Smart contracts have been audited by Quantstamp and are presently under going a second audit.
We will be working closely with the Rari Capital team to ensure that the pool parameters are responsibility set to reduce risk of liquidations.
Added Context: Previous Post
Please comment below thoughts, questions, & things we may have missed.