Summary:
In compliance with DIP011, dForce extended a total of 6m USX Inter-Protocol Secured Credit to Liqee (one of our ecosystem projects for liquid staking tokens). Given the credit limit has been fully utilized, it handicaps the ability for Liqee users to use USX as liquidity conduit to borrow other assets from dForce for leveraging their liquid staking tokens. We propose to increase the aggregate USX inter-protocol limits to 25m USX with flexible split between Ethereum and BSC and also to set the interest rate at 1.5% APR.
Background:
Our collaboration with Liqee is a great success. As we extended 6m USX inter-protocol limit to Liqee and allows its users to use their collateral to mint USX, all the USX on Liqee (BSC) has been fully utilized and it now puts constraint on user to further borrow and leverage their liquid staking tokens. Liqee users minted USX and use them to borrow assets from dForce Lending and it contributed over 10m borrowing to dForce. In order to further support Liqee and to satisfy its users borrowing demand and encourage more borrowing on dForce, we propose to increase the total USX limit to Liqee from 6m to 25m and set the interest rate at 1.5% APR.
Proposal:
We would like to advance the following proposals:
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Minting Secured Credit Line: 25,000,000 USX, with split between Ethereum and BSC at discretion of Liqee’s team (we expect more demand on BSC)
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Interest Rate: 1.5% APR
Evaluation and Analysis:
We believe this is a reasonable proposal with manageable risks:
Liqee’s USX limit on BSC has been fully utilized and it handicaps users to further leverage their liquid staking token.
The existing USX limit drove over 10m organic borrowing demand to dForce and we expect the borrowing to continue to increase if we increase the USX limit.
Next Steps and Required Actions:
Upon approval, we will proceed to implement the parameter change.
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