Thanks @bgdlabs for the elaborative introduction of Umbrella.
I’m not a fan of AAVE and ABPT as insurance tokens, but always felt the SM is a very needed module. Having AAVE and ABPT as stk tokens was suboptimal.
From what i read this is a massive improvement to the SM operation mechanism and capital efficiency.
I have a few questions:
- What happens if the insured token doesn have enough liquidity in umbrella to cover the loss? E.g. the pool is facing a bad debt of 100k USDe, but the stkUSDe turns out to not be that popular so the total pool is 70k. Who’s gonna account for the extra 30k USDe of loss? Will it be taken from another umbrella pool?
- If the answer to 1 is Yes, there must be a very meticulous guideline as to what covers for what.
- You mentioned some LP tokens will be allowed to be staked, e.g. gho/usdt, i presume these stk pools will use unique strategies to handle repayment atomically without any involvement of human hands right?
- Will there be a mechanism for the DAO to decide on a one-time custom strategy? I.e. a governance proposal to liquidate certain assets in a case of a black swan event. You mentioned EMERGENCY_ADMIN role, but i dont know if that’s what you meant.