AIP 45: Interest Rate Adjustment for the gmCauldrons

Governance Proposals Voted Proposals
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AIP 45: Interest Rate Adjustment for the gmCauldrons

Tl;dr Increase by 3% the interest of all the gmCauldrons bringing the various interest to:

gmARB: 7.2%

gmBTC: 8%

gmETH: 8%

gmLINK 9.9%

gmSOL: 9.9%

Introduction

The gmCauldrons have been extremely successful products, selling out consistently after each single top up. It is now time to slightly increase the interest on those cauldrons to capitalize on the demand, as well as reflect the overall market situation.

Interest Increase

This proposal is to raise all the gmCauldron interest rates by 3% to meet the high demand and overall market rates. This would bring the new interest rates to:

Increase to 3% following community discussion.

  • gmARB: 7.2%
  • gmBTC: 8%
  • gmETH: 8%
  • gmLINK 9.9%
  • gmSOL: 9.9%

Further interest rate increases will be subject to further DAO votes.

Next Steps

The current proposal will remain as an AIP for 48 hours, and then be moved to voting as AIP 45.

Snapshot link can be found here.

The proposal has passed.

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2% would be more fun but… 1% works too lol. Definitely need to make that money! Need to stay profitable, thats for sure.

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Seems reasonable. Could have been a 2% hike as @CarnJoe mentioned, but this could always be considered in the future. For now a 1% hike definitely seems reasonable given the current demand.

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4

While this proposal has gone slightly stale, I do think we need to consider this. Initially 1% interest hike was suggested, but given the current environment and MIM price, I think that we should consider hiking interest by even 3-4% across the board. That would increase profitability of the MIM already lent, and in potentially put some downwards pressure on the peg. I also think we should equally hike interest on the newest WBTC and WETH cauldrons. I think this interest hike hopefully should set the stage for doing some replenishes across all these cauldrons.

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5

I agree. With MiM being sold out pretty much across the board, and little room in the MIM3CRV pool to responsibly deploy more, to me it means adjustments might bring in better capital efficiency. Adjustments to either the interest rates, to the incentives on the MIM3CRV pool, or both.

Last I heard on the MIM3CRV incentives plan, Abra used bribes to incentivize liquidity in that pool. Is that currently the most effective means available? I don’t have my finger on the pulse of what new tech there might be for attracting more liquidity there, but I do remember us being early to utilizing bribes back in '21 is what led to Abra getting over a Billion $ TLV in that pool (Maybe $2B, but I cant find charts from back then). If there’s any way we can find another edge like that, then it might not be necessary to have to squeeze the borrowers with higher rates.