AIP 46: Add an ETH based cauldron on Blast.
Tl;dr: Add a new ETH based market on Blast, to allow Blast users to borrow MIM and pair it with USDB to take part in the bootstrapping event for MIMswap on Blast.
Market Parameters:
Interest: 6%
Borrow Fee: 0.5%
MCR: 80%
Liquidation Fee: 6%
Initial top up of 2m $MIMs, with the possibility of scaling up to 4m depending on volumes and liquidity without further votes.
Introduction
Following our successful winning in the Big Bang competition, and our planned Launch on Blast, it makes a lot of sense to deploy our first cauldron natively on Blast at Day 1.
Blast has attracted more than $2B in ETH and Stablecoins, which will fully unlock on Thursday and will be looking for a new home.
The developer points we received will be used both to incentivise ETH deposits into the cauldron, as well as USDB and MIM deposit into the LLE (Liquidity Launch Event) for MIMswap.
Considering the Launch of Blast Mainnet has been announced yesterday, the following proposal is a speedlane AIP, with voting lasting 24 hours, that will allow the cauldron to be live on Day 1 if the proposal successfully passes.
Risk Assessment
From a risk assessment point of view, this markets would have one of the lowest possible risk profiles possible.
On and off chain liquidity for WETH is deep and easily accessible for liquidators, especially on the sizes currently discussed. The treasury can be used as a liquidator of last resort if need be, easily sending MIM from any other chains directly into Blast.
Additionally, the DAO already has such assets accepted as collateral in other forms.
This proposal requires swift action because of the low risk of such collaterals.
Profitability
With the given parameters, and an initial top up of 2m MIM, this cauldron generates approximately 120k $MIM each over a one year time frame for the protocol and $SPELL holders. The number would scale up accordingly to the amount of MIM deposited into it.
Interest will be able to be scaled up accordingly following 24h voting periods.
Most importantly though, these cauldrons would allow us to capture market share natively on Blast on Day 1, and give away aprt of our developer point to Blast Users that are looking for leverage and borrow opportunities.
Technology
The following cauldron would use V4 cauldron contracts and would be deployed on Blastbox. Adding variable interest rate, upgradable oracles, and built-in strategy rebalance functions (in case a degenbox strategy were to be proposed on top of it).
Voting
Given the speedlaned nature of this proposal, the snapshot is already live and voting will continue for 24 hours, after which the cauldron will be deployed and top up executed if voting is concluded positively.
Snapshot link can be found here.
The proposal has passed.