The strategy has a function to swap the rewards for any given token, I could see the ETH and WBYC being swapped for MIM and integrated as revenue directly.
It’s a technical possibility
2 Likes
I strongly support this. Please discuss amongst team members
1 Like
as you create ycrv/crv leveraged cauldron , please consider crv as a payment alternative as well.
1 Like
Added a design graphic, with the consent of the mods!
1 Like
You have a good point. The protocol should not limit itself with caps of max 15% and 2.5% a week increase.
The original RFC kept exactly this in mind by indicating the possibility of further increasing the cap, if the DAO votes on it. Maybe we add an exemption to the regular process of voting towards these rate limit changes.
Meaning that if the DAO needs to increase these caps, we would not need to go through the entire governance framework, but could directly vote on an AIP.
A structure for such an AIP could be the following:
-Snapshot duration of 2 days
Name:
AIP X.1 (collateral name) Interest Rate Adjustment
(x being the corresponding number of the original interest rate adjustment of weth, wbtc AIP)
Current Limits:
Maximum rate: 15%
Max weekly increase: 2.5%
New Limits:
Maximum rate: 25%
Max weekly increase: 5%
Option 1:
Keep current limits
Options 2:
Change to new limits
The next question is, if we should adjust this RFC to the maximum rate of 25% and max +5% weekly increase, but have a target rate of 15% with a 2.5% increase. This allows us to quickly raise the rates if the need arises, but gives us a clear target to adhere to right now.
3 Likes
I like this plan a lot, no reason for promo prices in this market.
I think there should be a dedicated UI in the app for making these kinds of changes clear to users. Some simple central notification feed would work.
2 Likes
Wavey from Yearn here. I enjoyed reading this very clear, and well-written proposal.
The only downside I see here is that it may surprise depositors who were not aware of any mechanism to add an effective fee. This is a valid concern.
However, Abra’s ability to retain control over critical protocol parameters such as interest rates is paramount and long overdue.
With continued communication and transparency around this plan it seems like an obvious win for Abra. I fully support this move from the core team and their push to find creative solutions for weathering market conditions, and making the protocol’s healthy positioning a priority.
4 Likes
Thank you @wavey for the feedback, always happy to see the opinion of key players in this industry here on our forum!
1 Like
I think this is a very valuable framework for some time sensitive increase on such cauldrons. We should implement it in the proposal.
1 Like
Looks to me like this proposal is ready to be moved to AIP, @Melen.
Do you think we should add anything else before proposing it to SPELL holders?
1 Like
I like that idea a lot, once an initial proposal regarding interest rate change is passed, changes to those parameters could be fast tracked for further flexibility.
Added it to the main proposal
2 Likes
I don’t think it’s reasonable to force the lender to return the borrowed money (even if it’s by way of increased interest). The borrower borrowed the money and took it to make an investment ,he must have made 2 results now : 1)made a profit or 2)lost some money . But now it is almost a requirement: the borrower must have made a profit on his borrowing at this point in time (in order to repay it) .
It is unlikely that a normal lending platform would have this, suddenly saying that the money must now be paid back. This is so unfair to borrower ，especially retail borrowers. They may only have this borrowed money and don’t have any other extra money to pay back the loan.
During this bear market ,it’s very impossible for retail borrowers using his borrowed money to make a profit . For retail borrowers who don’t have extra money to divert, it’s almost like starting to liquidate it.
2 Likes
I think selling depositor collateral goes against the initial terms of the cauldron, it could create really unpleasantl surprises for users and would be bad for the reputation of the project.
Just shut off these cauldrons and create new V3 cauldrons for wBTC and wEth with adjustable interest rates
1 Like
We cannot shut off the cauldrons, we can only depreciate them (it’s already the case, nothing can be borrowed from it) but we can’t force users to close their position.
This fix we’re proposing to the DAO addresses that by incentivizing users to repay and close their positions.
In the future, if a WBTC or ETH cauldron was of interest to the users and profitable enough for the DAO, I know for sure that our community will come together and propose the opening of new cauldrons with better underlying tech (V3 or more).
In the meantime we can only use this method to incentivize the closing of these positions.
1 Like
If the Cauldrons are deprecated already, then that is sufficient. Users will naturally unwind their positions over time as needs arise. The peg is already very healthy and leaving the deprecated cauldrons as is doesn’t hurt anything.
Let’s focus on creating new cauldrons that create new value for the protocol, instead of damaging the protocols reputation with sneaky gotcha that weren’t even supposed to have been possible from the beginning.
1 Like
It is not, as right now the rates are 0%, which is far bellow market rate.
We therefore need to increase it to stay competitive.
The focus is indeed on the creation of new product, but we can’t keep cauldrons with MIM outstanding costing revenue to the DAO and not being profitable.
1 Like
I like the plan, can’t have free borrowing in these markets. Only suggestion is going forward have an optional contact field for cauldrons so people can be notified before or when a rate increase is implemented. Communication so people aren’t surprised is a must. After all these are our customers essentially.
3 Likes
Well users can also keep the $MIM and simply pay a higher interest tbh.
Remember that its all about profitability and increase in revenue per $MIM
2 Likes
Its better to do the best we can to focus on whats better for wizards and witches… definitely going in the right direction!! Less scattered… 
If this passes users are just going to withdraw and go somewhere else. We need market rates to be competitive. Think the current borrowing fee is sufficient.
The negative strategy is going to really piss off users that don’t keep up with governance.
1 Like