Proposal: Add renDOGE

Introduction

Does Dogecoin even need an introduction? Of course not, if you want to stay up to date about Doge, simply follow Elon Musk on Twitter.

But what has come to folks attention is that there in fact is a wrapped Dogecoin on Ethereum now, which actually launched very recently! And given the popularity, market cap, and trading volume of Dogecoin on centralized exchanges, the question is whether to bring this over into DeFi instead. Even Stani asked this question:

The community is divided: while some thing Doge is the standard, others bark at silly and crazy it is. However, whatever emotional feelings you have towards Doge, I think we should consider honestly whether adding it to Aave is beneficial for the protocol and the community, in terms of TVL, volume, growth, and security.


How is it wrapped

Just like renBTC, renDOGE is a 1:1 representation of Dogecoin, that can be minted and redeemed 24/7 completely permissionlessly through the RenVM network, currently through OpenDAO, or YF Link, and it will be available soon on the next revamped version of our in-house RenBridge.

RenVM is a byzantine fault-tolerant network that is able to securely in a decentralized manner do ECDSA threshold key generation and signing via sMPC, which allows RenVM to securely manage (ECDSA) private keys of different assets like Bitcoin, Zcash, and now Dogecoin, and wrap these assets on smart-contract chains like Ethereum and Binance Smart Chain. Since launch, RenVM has processed around $2B in total volume of Bitcoin, Zcash, Bitcoin cash, and Filecoin, going to and from Ethereum.

While the security of RenVM is controlled by the Ren team for now, we are very shortly beginning to decentralize this part, which you can read about here:

We’ve also announced that we will combine our sMPC solution with secure hardware to make it practically impossible for node operators to get access to the key shares and try to combine enough of them to steal any funds:


renDOGE liquidity

While renDOGE became possible to mint last week (26th January), we already have over 60m DOGE minted, which at the time of writing is about $2.3m. This has been fantastic growth, with liquidity pools and their volumes on Uniswap and LinkSwap matching that.

Token Contract

Uniswap pool

LinkSwap pool


So we want Dogecoin on Aave?

And what would the security parameters be, given how volatile Doge is?

4 Likes

I’m highly in favor of this ARC as you might’ve guessed from the quote above. The way I view RenVM’s bridge is that it will over time continue to 1) unlock cross-chain liquidity but also and, more importantly, 2) activate additional communities/users to use their investments. RenVM will enable crypto-fans and hodlers from all over the crypto world to use their investments in DeFi on any major chain (first on Ethereum, and hopefully, first on Aave). Aave could be the first major platform to usher in a new set of users, our Doge friends, into the DeFi space.

Hopefully my point comes across about the potential at hand here. As a community member, I’d love to strike while the iron is hot and while users are riding the DOGE train. This is our opportunity to welcome Doge holders to Ethereum. Let’s grab the chance while it is here. :frog:

Here’s an informal poll here so we can measure/signal sentiment.

Onboard $renDOGE as collateral for lending/borrowing?
  • For
  • Against

0 voters

1 Like

I would love to see renDOGE on Aave!

Very much in favour of this proposal, Would be very good for AAVE to bridge the doge community into the DeFi community

My one caveat as a AAVE holder would be for the maximum LTV ratio to be below 40% as doge is historically quite volatile my personal view is people being liquated is bad for us long term .

3 Likes

Regard maximum LTV. Setting a low value systemically does indeed forcefully reduce the risk of liquidations, but the platform setting such a parameter beget the conversation of individuals not being able to make rational decisions with their value allocation choices. 40% sounds reasonable, but isn’t it a persons choice if they want to take on excessive risk of liquidation?

$renDOGE is very young but seems like it’s getting traction very fast. We can argue about LTV but I definitely want to see it on AAVE. Lets do this!

1 Like

Isn’t the risk that if there was more volatility than the system could handle with regards to liquidations of the collateral, AAVE holders have to bear that cost?

1 Like

I’m more in the view that it is protecting AAVE holders I also don’t want to see people liquated unless absolutely necessary. Long term people who use and AAVE and have a good experience will keep coming back an our network effect will grow .

Seeing the massive growth in xSushi I think similar parameters do that would be ideal for renDOGE and for the AAVE