SIP-12: Increase USDC Allocation to Stargate

Author(s): Sperax Team Reference: N/A Created: 9/12/22 Labels: #Other #Yield-Strategies

Simple Summary

As multi-strategy collateral deployment capabilities are being built out, the majority of USDC sits idle in VaultCore, which can be deployed to generate yield. An increase from 50% to 80% USDC allocation in stargate will increase protocol revenue until the upgrades are finished and tested.

This revenue will fund a higher Auto-yield rate and greater SPA buybacks and burns.

Abstract

The last Auto-Yield distribution was just over 4%. As USDs adoption grows, ideally this rate is closer to the max rate of 11%. Increasing USDC allocated to yield generating strategies from 50% to 80% will allow the protocol to generate revenue in the short term while the necessary upgrades are coded and tested to allow for one collateral type to be deployed into two different yield strategies.

In the meantime, Sperax community and team can start promoting the opportunity to gain gas-free yield by minting USDs with FRAX, DAI and VST. This will reduce the protocol’s reliance on USDC / Stargate for yield generation.

Motivation

Increase Auto-Yield and Staking APR during upgrade process.

Overview

Community members may have noticed the lower Auto-yield rate and Staking Yield of ~4% and ~51% respectively. This was rooted in the fact that 50% of all collateral is sitting in the VaultCore. The stablecoin collateral in VaultCore is redeemable, but does not earn yield.

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At the time of writing this, community members have deposited $4.975M worth of stablecoins to mint USDs:

3,747,000 USDC
25,112 DAI
705,000 FRAX
498,198 VST

Of the nearly $5M stablecoins, 2.7M are sitting idle inside VaultCore. This was the root cause of the lower Auto-Yield APR and lower staking yield this past week.

Technical Specification

Getting to 80%: To achieve the 80% ratio of USDC deployed in Stargate vs in VaultCore, USDC will be sent from VaultCore to the USDC Strategy Contract right after this proposal passes.

Staying around 80%: This ratio will be rebalanced to 80% weekly depending on minting and redeeming of USDs using USDC.

start

September 15, 2022

1:38 PM

end

September 18, 2022

1:38 PM

Voting

off-chain

Voting type

single-choice

Voters

102

Votes

109,522,404

Final Votes

closed

Yes

109.5M veSPA

100%

0 veSPA

item label

Placeholder title of a dao proposal

DAO name

0x000000000000

Mon 00, 2024 00:00

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