Summary
This proposal seeks to integrate USDT0 (the new omni-chain Tether built on LayerZero’s OFT standard) into the dForce ecosystem and gradually offboard USDT on Conflux. This transition aligns dForce with Conflux’s latest stablecoin standard, ensuring improved interoperability, liquidity depth, and user experience.
Background
Conflux recently announced support for USDT0 and CNHT0, introducing a new standardized bridging framework for stable assets.
Compared to the USDT, USDT0 offers:
- Unified Liquidity: Efficient liquidity management across connected chains, reducing fragmentation and improving capital efficiency.
- Enhanced Transparency & Security: Strengthened bridging and verification mechanisms.
- Cross-Chain Expansion: Enables effortless scalability and integration with new blockchains through standardized infrastructure.
- Optimized DeFi Routing: Eliminates the need for intermediary bridges or wrapped assets, reducing complexity and operational overhead under the OFT standard.
Given Conflux’s migration direction and ecosystem adoption of 0-denominated assets, it is both timely and strategic for dForce to align its supported assets accordingly.
Motivation
- Ecosystem Alignment: As the Conflux ecosystem transitions to USDT0, remaining on USDT risks liquidity fragmentation and reduced composability.
- Liquidity Optimization: Consolidating liquidity into USDT0 markets enhances depth and capital efficiency.
- User Experience: Simplifies stablecoin interactions for users, reducing confusion between duplicate USDT markets.
- Future Compatibility: USDT0 is built on LayerZero’s OFT standard, which supports cross-chain expansion beyond Conflux — consistent with dForce’s multi-chain vision.
Implementation
Integration of USDT0
- Unitus Lending: Introduce USDT0 as collateral across dForce protocols on Conflux.
- RWA Vaults: Keep the current vault unchanged; the next vault will support USDT0.
- USX Stablecoin: Add USDT0 to the reserve to enable minting and redemption of USX.
Sunset of USDT
- Freeze existing USDT deposits and borrows across lending, RWA, and USX modules.
- Allow withdrawals and repays of existing USDT at any time.
- Migrate internal liquidity pools and risk parameters to prioritize USDT0.
- Remove USDT markets post-migration completion.
Specification
This proposal, if approved by governance, will take effect from 20 November.
| Parameters for USDT0 | |
|---|---|
| Collateral Factor (Loan-to-Value) | 85% |
| Liquidation Threshold | 88% |
| Reserve Factor | 10% |
| Liquidation Penalty | 7% |
| Supply Cap | 2,000,000 |
| Borrow Cap | 2,000,000 |
| Oracle Provider | Pyth - USDT0/USD |