Summary
The implementation of POO (Protocol-Owned Operator) (approved through DIP019) enables the protocol to mint USX and EUX against protocol-controlled assets as collateral, leverages the PDLP initiative to increase liquidity for USX and EUX in the open market, uses dForce protocol to participate in staking or farming, and generates the highest risk-adjusted return for DF holders.
POO would initially fulfill the following functionalities:
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Provide liquidity to AMM pools for dForce stablecoin assets and DF, building a sustainable path that will eventually remove liquidity mining subsidy.
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Borrow directly from the protocol to earn a return through multiple strategies (i.e., leveraged staking through collaboration with Liqee).
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Facilitate integration with a broader range of DeFi protocols.
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Facilitate cross-chain expansion.
Risk Mitigation and Rationale
In dForce POO strategies, we intend to engage mostly in risk-neutral strategies, from providing stablecoin liquidity and interacting with lending protocols, to yield arbitraging between underlying assets (i.e., ETH) and staking assets (i.e., wstETH) via Protocol-Controlled-Staking-Operation.
In the near term, a considerable amount of protocol-controlled asset will be utilized as collateral to mint USX and EUX, exchange USX for the relevant paired asset (i.e., USX/DF), and gradually acquire and control most of the liquidity of dForce assets in the open market.
In addition, we also intend to combine PDLP with yield generating strategies to facilitate faster expansion, i.e., further leveraging USX to increases organic usage as well as protocol revenues through yield-carry trade.
Disable New Minting of dForce Synthetic Assets
dForce launched synthetic versions of some of the most popular stocks (xTSLA, xAMZN, xAAPL, xCOIN) as well as synthetic cryptoassets (xBTC, xETH) in the summer of 2021. This trial has enabled us to gain substantial insights about synthetic assets.
In order to streamline our protocol feature and utility with a better user interface, we propose to disable new minting of these synthetics, while the community can decide if we should open them up on other venues.
Minting of the following synthetic assets will be disabled on Ethereum and BSC: xTSLA, xAMZN, xAAPL, xCOIN, xBTC, xETH.
IMPORTANT: existing users who minted aforementioned synthetic assets from dForce Lending & Synthetic Protocol can still redeem or repay their outstanding loans through the protocol at any time.
Proposal
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Approve 50m USX limits for POO operation, which could be deployed across different chains.
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Disable new minting and lending of dForce synthetic assets including xTSLA, xAMZN, xAAPL, xCOIN, xBTC, xETH on Ethereum and BSC.
Vote through Snapshot