AIP #32 - Add a Stargate USDT Cauldron on KAVA

RFC - Stargate USDT Cauldron on KAVA

Tl;dr Add a Stargate USDT cauldron on KAVA network.

Cauldrons parameters:

  • 0.15% Borrow Fee

  • 0.5 % Liq Fee

  • 97 % LTV

  • 3% Interest

Initial top up of 2m $MIMs, with the possibility of scaling up to 10m depending on volumes and liquidity. Further top ups will require 24 hours voting periods.

Proposed Oracle: Redstone


Following the successful launch of Abracadabra Infrastructure on KAVA chain as per AIP #23, the effort to find suitable collateral can now successfully start. One of the first proposals that the DAO should assess is Stargate USDT as collateral.

In the last month, Stargate has successfully launched on KAVA network allowing for single side staking of native USDT tokens in order to farm STG rewards. This successful launch allows for the DAO to deploy a Stargate USDT implementation, similar to the one currently live on other networks.

Risk Assessment

The DAO already accepts stargate USDT as collateral on Mainnet, hence the most important assessment related to this collateral is USDT liquidity on KAVA. After its native launch on KAVA, USDT has been the major stablecoin that has been able to attract liquidity there. Most of its TVL can be seen currently on Curve, where it can also be easily swapped for MIM.

The main concerns related to such a cauldron would probably come on the Oracle side. Unfortunately, Chainlink price feeds are not yet available on KAVA, forcing us to choose another provider.

One of the offered solution right now seems to be Redstone Finance. Redsone seems to be the most reliable option right now.

Hopefully, more providers will come, and more options will be presented for the DAO to choose from in future proposals.

Profitability and Cauldron Parameters

Cauldrons parameters:

  • 0.15% Borrow Fee

  • 0.5 % Liq Fee

  • 97 % LTV

  • 3% Interest


Assuming a 5m $MIM yearly top up, and a 3% interest, the following cauldron would produce roughly 150k MIM in profits, over a one year time frame for the protocol and $SPELL holders.

We expect this limit to be raised fast and smoothly as more usage comes to Kava.

Additionally, the cauldron will allow users to perform leveraged farming on stablecoins, which is a highly requested product by both the Abracadabra and Kava communities.


The following cauldron would use amended V4 cauldron contracts and would be deployed on Degenbox.

Adding variable interest rate, upgradable oracles, and built-in strategy rebalance functions. A degenbox strategy working similarly to the ones currently live on mainnet will also be deployed.

As mentioned above, my first proposed Oracle solution is using Redstone Finance oracles. In order to be extremely cautious, I would propose to add a backstop safe on the Redstone price feed that would not allow the oracle to price USDT above 1.01$ and below $0.95.

This setup would allow to already deploy the cauldrons, even without Chainlink, while having a failsafe mechanism to avoid incorrect price reporting caused by oracle or manipulation issues.

In case of actual extreme market volatility in the price of USDT, the DAO will be able to update the oracle accordingly without the need of another vote.

This solution is only an initial brainstorming and further oracle options should be proposed and addressed as well, underneath this post.


The current proposal will remain as an AIP for 72 hours, and will then be moved to snapshot. Snapshot voting starts Sunday 1/10/23.

Given the following proposal is related to adding a new collateral, the snapshot voting period will be set to 48 hours. Snapshot voting can be found here.

Voting has passed.

1 Like

Regarding the Oracle - does layer zero have an opinion on red stone ?

1 Like

Oh hell yea, Redstone looks like an incredible choice!!! They are focusing on making interoperability between blockchains and external data sources faster so that’s probably exactly what is looking for lol BEAM that data! Raised nearly 7m apparently with the help of Coinbase Ventures!! as well as a ton of other investors.

Though gotta say, DIA is looking like a pretty good choice as well… they are community focused and have a governance for holders of their token. Heres 2 of DIA’s latest Forum Activities:

CAR #073: Velodrome | Source - Proposals / CARs - Community Approval Requests - DIA Forum | Cross-Chain Oracles for Web3 (

CDR #059: Souq | GRAIL and GNS Price Feed - Proposals / CDRs - Custom Delivery Requests - DIA Forum | Cross-Chain Oracles for Web3 (

Velodrome and GRAIL are winners!!! I really like where DIA is placing its interests, the community around DIA seems pretty bright! Though only downside is that im pretttty sure they dont support KAVA yet either… which stinks.

So Redstone definitely seems like the best choice considering KAVA. otherwise, DIA looks really cool.

Will be awesome seeing abra work closer with stargate though!! accepting stargate USDT is definitely a win-win. Awesome RFC Romy!! :man_mage:

Considering the latest updates, I would propose:

  • 0.15% Borrow Fee
  • 0.5 % Liq Fee
  • 97 % LTV
  • 3% Interest

Using Redstone oracles, with a safeguard to avoid extreme price volatility.