dForce DAO proposes to off-board BUSD from dForce Lending across all L1/L2 chains supported.
In February 2023, Paxos Trust Company announced it would stop minting new BUSD tokens but will continue to support the redemption of pre-existing BUSD for their underlying value till February 2024.
Consequently, dForce DAO proposed to de-risk our BUSD exposure with a gradual step-down adjustment on TVL and other parameters through DIP037.
In August 2023, Binance said it will “gradually” end support for BUSD, removing it from spot and margin trading pairs. Users have been asked to convert their BUSD into other assets by February 2024.
Therefore, it’s necessary for us to implement an off-boarding plan for BUSD and encourage users to switch other alternatives.
Should dForce community approve this proposal, the off-boarding plan will be carried out in two steps:
- Disable deposit and borrow BUSD immediately (BUSD withdrawal and loan repayment will remain unaffected).
- Modify risk parameters for BUSD, pushing up the capital cost for BUSD borrowers so that they will be incentivized to switch to other stablecoins.
The parameter adjustments will occur in two phases on 10 Sep and 10 Oct 2023: