Channel: Business Development
We have an opportunity to increase extrinsic productivity for DPI, MVI, FLIETH, FLIBTC and INDEX by creating a community governed Fuse Pool on Rari capital. The Fuse pool collateral management will be governed by INDEX holders with decisions executed through a multisig controlled by members of the product team.
The FUSE pool will enable users to:
- Earn interest on Index Coop products and our governance token
- Enable users to create leveraged exposure (CDP’s) on our products and governance token
Rari Capital is a multi-purpose DeFi platform that enables users to unlock enhanced productivity for their crypto assets through three of their products namely Earn, Fuse and Tranches. The protocol is governed via a DAO structure which is represented by the RGT governance token. As of this post Rari Capital platform has attracted over $100 million in TVL.
Fuse is a lending and borrowing protocol based on Compound protocol. It enables DeFi protocols, projects and DAO’s to create and manage their own lending and borrowing markets.
For Index Coop this pool offer the following benefits:
- Increase the extrinsic productivity across our product line including our governance token
- Enable us to develop new products using the FUSE lending and borrowing protocol
- Enhance governance utility for INDEX
- Build a unforkable relationship with a reputable DeFi protocol
*Rari Capital yield aggregator Earn will divert liquidity in the form of ETH, DAI & USDC based on the APY’s of the pool.
We propose that we seed liquidity for the pool with assets in treasury:
We will engage with the Treasury Working Group (TWG) to decide on the best method to seed liquidity for the pool.
The Fuse pool will be created with the following specifications parameters:
Close Factor: 50%
Liquidation Incentive: 30%
Platform Fee: 10%
|Collateral||Collateral Factor||Reserve Factor|
The above parameters were recommended by the Rari Capital Team.
Management of the fuse pool will be initially handled by Samuel Shadrach who leads fuse pool management for Rari Capital team. The process will gradually be handed off to members of Index Coop.
Smart Contract Risk:
Rari Capital Smart contracts have been audited by Quantstamp.
We will be working closely with the Rari Capital team to ensure that the pool parameters are responsibility set to reduce risk of liquidations.
Index Coop - Create and manage TWAP or chainlink pricing oracles for FLIETH, FLIBTC and MVI
Rari Capital - Will create the Fuse pool based on the above parameters
- Social media announcement to create awareness of the pool through both parties’ media channels
- Article and twitter thread about the use cases of the pool
Rari Capital marketing channels:
Twitter: 20.3K Followers
Youtube: 308 Subscribers
Discord: 7,152 Members
Medium: 311 Followers
- Pool liquidity
- Average utilization rate
- $10 million liquidity
- Average utilization rate of 50% across the pool
Future avenues of development:
- Rari Capital as a methodologist for structured products
- Incentivising borrowing and lending demand with INDEX
- Treasury investment account can earn yield from a lending & borrowing pool controlled by Index Coop
- Create an IIP for treasure to fund seed liquidity for the pool
- Set up a multisig to control the parameters of the pool
- Create a snapshot on Rari Capital DAO to create the pool
I will create a poll for whether or not we should seed the liquidity for the pool with the treasury after initial feedback.
The original Index Coop Fuse pool proposal can be found here: Add Index Coop Fuse Pool - Rari Governance Forums
Please note the proposal has changed based on the below recommendations from the Rari Team, changes shown with a (*)
- Launch pool with seed liquidity from treasury
- Launch pool without seed liquidity from treasury
- Do not launch the pool