Authors: Gauntlet, Marc Zeller @marczeller - Aave-Chan Initiative
Date: 2023-07-13
Summary
This proposal aims to initiate the offboarding process for TUSD from the Aave V2 Ethereum pool. The process will follow a similar process as the BUSD offboarding plan part I.
Gauntlet does not quantify risk associated with centralized stablecoins and regulatory concerns. In light of this, we provide this framework with ACI to the community to gauge preference and thoughts around further TUSD deprecation.
Motivation
TUSD has been a historic asset of the Aave ecosystem, but due to recent events, the ACI suggests consideration of its offboarding. The offboarding plan leverages the previous success of the BUSD offboarding plan and will incentive current users to slowly migrate their positions to other stablecoins on Aave.
Previous proposals have frozen TUSD and lowered TUSD LT to 77.5%. These proposals have reduced TUSD borrow and supply over the past 30 days, from 20M supplied and 18M borrowed, to 13.1M supplied and 6.8M borrowed today.
Specification
The following table outlines the proposed changes to the TUSD risk parameters:
| Parameter | Current Value | Proposed Value |
|---|---|---|
| LTV | 75% | 0% |
| Liquidation Bonus | 5% | 10% |
| Reserve Factor | 25% | 95% |
| Borrowing Enabled | Yes | No |
| Stable Borrowing Enabled | Yes | No |
| Base Rate | 0% | 3% |
| Slope1 | 4% | 7% |
| Slope2 | 100% | 200% |
| UOptimal | 80% | 20% |
Meanwhile, Gauntlet provides the following options to lower LT.
- This sets immediate bounds on the maximum debt that can be taken out with TUSD collateral, however it may force liquidate users.
Option 1: lower LT to 75%.
0 Forced liquidations, as of data on 2023.07.13.
Option 2: lower LT to 60%.
Forced liquidations - total ~ $877k in supply, 4 accounts, as of data on 2023.07.13
| Address | Health Factor | Health Factor with New Parameters | Total Borrows (USD) | Total Supply (USD) | Assets Borrowed | Assets Supplied |
|---|---|---|---|---|---|---|
| 0x16af29b7efbf019ef30aae9023a5140c012374a5 | 1.05 | 0.82 | 644897.59 | 877486.0 | [WETH] | [TUSD] |
| 0xd4b954c7dbd77c2fadcd66ec681dd992e97a9374 | 1.05 | 0.81 | 80.69 | 109.0 | [WETH] | [TUSD] |
| 0xb56b29401afcc285d7b967a3164bfa58f94f70e7 | 1.10 | 0.85 | 73.04 | 103.0 | [USDC] | [TUSD] |
| 0x017b3763b8a034f8655d46345e3eb42555e39064 | 1.05 | 0.81 | 0.00 | 0.0 | [SNX] | [TUSD] |
Option 3: lower LT to 40%.
Forced liquidations - total ~ $920k in supply, 7 accounts, as of data on 2023.07.13
| Address | Health Factor | Health Factor with New Parameters | Total Borrows (USD) | Total Supply (USD) | Assets Borrowed | Assets Supplied |
|---|---|---|---|---|---|---|
| 0x16af29b7efbf019ef30aae9023a5140c012374a5 | 1.05 | 0.54 | 644897.59 | 877486.0 | [WETH] | [TUSD] |
| 0xe66c21632e5fe9884b43c9b2573a61373a7264d9 | 1.02 | 0.98 | 27214.96 | 32409.0 | [WETH, USDC, TUSD] | [AAVE, WETH, USDC, TUSD] |
| 0xea40afcba852f3c9b4d47f91b5ca6924283498df | 1.42 | 0.91 | 6401.85 | 11479.0 | [USDC, DAI] | [WBTC, USDC, TUSD] |
| 0xd4b954c7dbd77c2fadcd66ec681dd992e97a9374 | 1.05 | 0.54 | 80.69 | 109.0 | [WETH] | [TUSD] |
| 0xb56b29401afcc285d7b967a3164bfa58f94f70e7 | 1.10 | 0.57 | 73.04 | 103.0 | [USDC] | [TUSD] |
| 0x2648e99bc8ebf9164cff4b0432d0522618e65241 | 1.67 | 0.86 | 11.03 | 24.0 | [DAI] | [TUSD] |
| 0x017b3763b8a034f8655d46345e3eb42555e39064 | 1.05 | 0.54 | 0.00 | 0.0 | [SNX] | [TUSD] |
Disclaimer
This proposal is powered by Skyward. The Aave-Chan Initiative is not presenting this ARFC on behalf of any third party and is not compensated for creating this ARFC.
Next Steps
Welcome community feedback and initiate snapshot on 2023.07.24. If the Snapshot outcome is YAE, this proposal will be escalated to AIP stage.
Copyright
Copyright and related rights waived via CC0.