DCP-8: Beginning a LM Program for dUSD

Header Content
Author Andy Cav
Created 2022-03-10
Status Pending

Motivation

The dHEDGE platform is ready to grow into a full blown decentralized asset management protocol that can support large transactions. We are gearing up to bring lots of stablecoin volume into dUSD but we are struggling with slippage that takes a big cut of the proposed dUSD yield (which is really great). In order to scale dusd we need more dusd/usdc liquidity.

Description

A 3 month liquidity mining program where we reward dusd/usdc LPs on Uni V3 in between $0.98-$1.02 range on Polygon with 100,000 DHT tokens starting 7 days after a snapshot vote passes.

Implementation

Once vote passes the DAO would put DHT tokens in a smart contract where LPs could stake for the token emissions.

2 Likes

Could you add a header to this proposal? See other proposals (needs a creation date, status, author, etc.).

1 Like

Nice one @defislate

I think bringing down slippage for dUSD is a great initiative.

There might be an option to cut out slippage altogether by allowing managers to deposit directly into the dUSD pool. Thoughts?

1 Like

done – thanks for the headsup

Yeah I think that would definitely help the scenario, on the back end here aren’t we still faced with the same issue where we need to deposit the USDC or other stable into the dUSD smart contract / trade it into dUSD on uniswap? Or would this avoid the problem!

Hi. So on the roadmap, we’re planning on moving dUSD to Toros, so deposits and withdraws can avoid this arbitrage and liquidity issue causing slippage.

Normal users don’t run into this slippage issue if they deposit directly onto dUSD through dHEDGE. But, managers, have to go through a DEX, such as Balancer or 1inch. If the price is not the same as what’s held in the dUSD contract it’s shown as a drop or spike in performance (usually has been a drop), on top of normals slippage due to liquidity.

Allowing deposits through Toros would solve the issue, better than increasing liquidity on a DEX.

Today, I’ll make a few posts to reveal more of the roadmap, as the Aurora release is wrapping up.

aren’t we still faced with the same issue where we need to deposit the USDC or other stable into the dUSD smart contract / trade it into dUSD on uniswap? Or would this avoid the problem!

Yup @edson sums it up well.
Avoids the problem. It would be as simple as depositing USDC and getting dUSD directly.

Created the proposal here: DFP-21: Move dUSD to Toros.