SAIP 54.1 - Launch of Secondary sdeUSD Cauldron
Tldr: Due to overwhelming demand, we propose the launch of a secondary sdeUSD cauldron with updated parameters to meet the high demand and ensure broader user participation.
Introduction
The initial sdeUSD cauldron launched under SAIP #54 experienced tremendous success, selling out in just 25 minutes, which unfortunately left many users unable to participate. To address this and continue capitalizing on the demand for sdeUSD collateral, we propose the introduction of a secondary sdeUSD cauldron with revised metrics to balance user demand.
This follow-up proposal maintains our strategic collaboration with the Elixir ecosystem and aims to extend the benefits to a broader audience. The updated parameters reflect our commitment to optimizing risk management while offering competitive terms to users.
Updated Cauldron Parameters
The secondary sdeUSD cauldron will be launched with the following parameters:
- Interest Rate: 9.6%
- Borrow Fee: 0.5%
- Minimum Collateralization Ratio (MCR): 85%
- Liquidation Fee: 7.5%
Initial Top-Up and Scaling
- Initial Top-Up: 3 million $MIM
- Scaling Potential: The cauldron may scale up to 10 million $MIM without requiring additional approval from the DAO. This scaling will be contingent on MIM liquidity, specifically focusing on the MIM-deUSD pool on MIMSwap, to ensure that the secondary launch can meet demand while maintaining stability in the cauldron and the broader ecosystem.
Background
The overwhelming response to the initial sdeUSD cauldron highlights the demand for elixir-focused collateral options. The introduction of a secondary cauldron serves to further strengthen Abracadabra’s position in the market while expanding user access to sdeUSD as a collateral type.
This proposal aligns with our ongoing strategy of integrating ecosystem-native assets that meet stringent liquidity and stability criteria. As with the original proposal, this secondary cauldron will tap into the robust demand for sdeUSD, providing additional opportunities for users to leverage their assets within the Abracadabra ecosystem.
The speedlaned template is required as most of the risk analysis for this collateral already happened, therefore less time to be approved is required.
Conclusion
The launch of the secondary sdeUSD cauldron under SAIP 54.1 is a strategic response to the overwhelming demand observed during the initial launch. By offering a new cauldron with updated parameters, Abracadabra can extend the benefits of sdeUSD collateral to a wider audience while maintaining a strong focus on risk management and protocol profitability.
Next Steps
This proposal will remain open as a SAIP to allow the engineering team to finalize the integration process for the secondary cauldron. A 2472-hour period will commence to gauge the DAO’s position on this proposal.
Voting is posted here and will commence in 24 hours.