Summary
This is a proposal for creating a new liquidity market to support USDM stablecoin token for lending and borrowing on the Liqwid protocol.
This proposal is a continuation of the original community proposal posted here.
Project and Token Overview
USDM is a Cardano stablecoin. We note that the token Moneta has been recently rebranded (previously Mehen), but the website name has not been changed yet. https://www.mehen.io/
What is Moneta? [source]
Moneta is at the forefront of creating the USDM fiat-backed stablecoin, an essential tool for Cardano. USDM serves as a base asset for decentralized finance (DeFi) protocols and enables instant on-chain payments.
Fiat-Backed Stability: Every USDM token is backed 1:1 by USD in a US-based bank, ensuring its stability and reliability in the volatile world of cryptocurrencies.
Cardano Integration: As a Cardano native asset, USDM benefits from the security, efficiency, and interoperability of the Cardano blockchain.
Moneta has currently a supply of $4.9 million.
USDM Market Reasoning
Stablecoins are needed on Cardano and Liqwid, therefore we propose to add the USDM token as eligible market on Liqwid for supplying and borrowing (incl. being used as collateral).
Risk Considerations
Despite being a new fiat-backed stablecoins on Cardano token, the Liqwid Core team has undergone an internal due diligence and we are confident that the team is solid, and that their operating model ensures that Moneta (USDM) tokens are backed by enough USD reserves in the traditional finance world.
As the liquidity is fluctuating, but USDM are backed by USD reserves, we propose to hardcode the value of USDM at $1 in Liqwid without using any external oracles.
Suggested USDM Market Parameters
The interest rates proposed would be the same as the other stablecoins listed on Liqwid, such as DJED or iUSD.
Interest rate market parameters:
- BaseRate 5.00%
- utilMultiplier 4.00%
- utilmultiplierjump 775.00%
- Kink rate 65.00%
Income Factor: 20.00% (80% of the interests paid by the borrowers are given to the suppliers). The remaining part is split as following:
- Reserve Factor: 5.00%
- DAO Factor: 5.00%
- LQ stakers: 10.00%
The proposed USDM risk parameters are:
- Collateral factor ( maxLTV): 79.9%
- Liquidation threshold: 80%
- Liquidation discount: 10%
The supply cap for USDM will be set to 1 million tokens at the Liqwid’s listing date.
USDM token borrow cap will be set to 90% of the total USDM supplied, forbidding any borrowing.
→ The USDM tokens would be used as collateral to borrow any assets on the Liqwid protocol.
Specifications
The Liqwid Labs developers have already completed the technical requirements to list any tokens. Following this temperature check, the team will work on USDM preparation work including: 1) testing the proposed interest rate model, 2) completing the off-chain updates to support multiple collateral asset loans and 3) configuring the oracle price feed, which will be hardcoded at $1 to start.
Conclusion
The Core Team recommends the adoption of this proposal and to add USDM as a token for lending and borrowing on Liqwid with the proposed market parameters.
Do you support the listing of the $USDM token with the proposed parameters?
- Yes, I support the listing of $USDM token
- No, I do support the listing of $USDM token