Add 1% fee on liquidations and Iasset mints to fund Protocol owned Stability Pool

I propose we add a 1% fee on the Iassets minted as well as the Iassets burned in Stability pools. This fee would be in the form of the Iasset being minted or burned and would go directly into the stability pool under the control of Indigo in effort to increase protocol owned stability pool positions, further strengthening the stability of the indigo platform.


since the DAO would also be entitled to some Indy rewards we could set a schedule to sell those rewards and buy Iassets off the market to put into stability pools.

I know some would not appreciate the negative price action on Indy but overall it helps make it more accessible and further strengthens the protocols stability.

1 Like

Taking fees for minting and burning iAssets and then using those fees to add into a protocol owned SP might be a good idea to explore?

Buying iAssets from the market using the fees collected might add into the upwards depeg of the iAsset which I think is not good.

Wouldn’t that discourage arbitrage which is critical to maintain the peg on iAsset? I love the the idea of having protocol owned stability pool but I fear that arbitrage might take a hit as you would have to make at least 2% more if you mint and burn. Maybe having a 1% or more fee when removing from the stability pool might be a better way. This would also help stabilize stability pool by having people commit longer into the stability pool to get back their fee but on the flip side might stop some people from supplying to the stability pool (This doesn’t seems to be a problem right now as stability pool seems healthy)

As for buying iAsset, as James said, it would not help keep the peg especially on lower liquidity iasset. The indy received by the protocol owned sp could be given back to indy stakers which are the protocol owners

1 Like

I do not believe this would discourage arbitrage, it would be an additional cost arbitrageurs would have to consider. Maybe it should not be collected on Iasset burn, rather as you suggest, when it is removed from a pool. I believe it is a reasonable fee for minting as well as it helps us cover some of the risks of the minting of the Iasset. Currently there are no fees besides transaction fees when opening a cdp. I think it would be reasonable that a fee is placed at that stage to promote the stability of the platform. I believe people will continue to use the platform with these fee’s, and in the end since these pools would be owned by the DAO it should reflect well for holders of the Indy asset controlling that DAO. I agree the stability pools seem healthy currently and I hope we can continue finding new ways to maintain and increase the health of the system.

I also agree I may be wrong about buying Iassets from the market by selling Indy, maybe as you suggest that should be redistributed to Indy stakers.

If the DAO owns SP positions it will generate ADA rewards. Would we want to then use that ada to open and maintain CDPs at a high CR, say %300, staking any debt created in the SP?

Maybe for partial $INDY rewards. As a DAO you want the keep a healthy amount of $INDY tokens to secure the protocol. I’m seeing one big whale buying those tokens in the shadows, untill his/her bag is full to take over the protocol. Or am I being to dramatic?

I agree the DAO should hold some of its own tokens, I believe some were allocated in the whitepaper. If some has been allocated I do not see the reason for the DAO to gather more, but they could always be redirected in the future. if it doesn’t have any than this would be a great way to start building some up.

I am not concerned about that. while not impossible it would be incredibly expensive to do so, they would probably have to buy out several existing major holders. Once that has been accomplished what would be the concern? sure it would suck if it was controlled by a single entity but it would be in their best interest to keep the platform profitable and increase its value. I do not see any upside to an individual to buy out the project then start being malicious with it. IMO the greatest threats to INDY would be from a bad actor within the core/dev team, or an exploit to the smart contracts being found an exploited by an outside actor.

1 Like