Proposal to Whitelist iSOL

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Abstract

The last iAsset listing of iETH was 2 years ago for Indigo Protocol. Since then, the protocol has undergone significant restructuring since its V1 launch. We are confident in the capability of the protocol to support additional iAssets with the suggested parameters below as a viable launch starting point.

Solana has been constantly trading in the top 3 of the overall cryptocurrency market capitalization table, which indicates significant desire for its exposure across the space.

With the anchored peg stability seen in iBTC and iETH since V2.1 deployment, we believe that it is the right time to introduce a new iAsset into the mix for the protocol and Cardano DeFi ecosystem!

Parameters for iSOL

Minting Fee: 0.1%
Stability Pool Fee: 0.05%
Maintenance Ratio: 115%
Redemption Margin Ratio: 150%
Liquidation Ratio: 110%

Interest Parameters

Base Interest: 5%
NTCR: 170%
CTCR: 250%
Upper Limit Int: 20%
Max Disc Factor: 95%
Buffer Rate : 5%

Launch Process

New iAssets will launch with a initial interest of 5% for the first 6 epochs after which it will transition to the algorithmic interest released in V2.1

The protocol will withdraw 200k ADA with 8k INDY from the DAO Treasury.
200k ADA to open the DAO owned CDP at 150% CR.
The newly minted iSOL will be deposited into the iSOL Stability Pool to ensure sufficient solvency.

Any INDY rewards earned from Stability Pool staking will be returned to the DAO Treasury upon withdrawal.

6k INDY will be used to incentivize the SP over 6 epochs.
On the beginning of the 3rd epoch 500 INDY per epoch for 4 epochs (totaling 2k INDY) will be used to incentivize the DEX with the largest TVL for the remaining epochs. The PWG will be tasked with deciding which DEX to provide INDY rewards to based on organic liquidity distribution.

In order to ensure the healthy bootstrapping of the new iAsset, the DAO will not remove its CDP or Stability Pool position until iSOL reaches the following metrics consistently over a 2 epoch period:
At least 5 million ADA Market Cap of minted iSOL
At least 50 diversified user CDPs
Saturation of 60% in the iSOL Stability Pool

After this period, the DAO owned funds will be held for a period of an additional 30 days in the Indigo Foundation multisig to ensure easy access to rainy day funds in case market dynamics shift unexpectedly and the iSOL Stability Pool needs replenishment. After these 30 days, the funds will be reallocated to the DAO approved Treasury Management structure.
The rewards to support this new iAsset will then shift to 2000 INDY per epoch which will be redirected from INDY stakers allocation for iSOL Stability Pool and Liquidity Providers.

Oracle

Indigo Labs will deploy and manage an ADA/SOL oracle feed, similar to the ones used for iBTC, iETH, and iUSD, by referencing the Chain Link oracle data on the Arbitrum network. The feeds used are: SOL / USD Price Feed | Chainlink and ADA / USD Price Feed | Chainlink.

Minimum Heartbeat: 55 minutes
0% deviation threshold

We estimate it will cost ~2000 ADA per month and this will be a part of the DAO’s opex expenditures.

Conclusion

We invite all stakeholders to review the details and contribute their feedback and suggestions. The Indigo Labs team remains committed to transparency, innovation, and the continuous improvement of the Indigo Protocol, and we look forward to your support in this significant step forward.

23 Likes
2

This is great for providing more options to consumers and should assist with driving adoption of Indigo and Cardano.

7 Likes
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I am down for this! Let’s go!

4 Likes
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Nice work Team Indigo, this is growth mode for sure. Will open eyes to the protocol, new eyes + old eyes, and hopefully increase participation across the board!

4 Likes
5

This is a perfect proposal. Let’s send it!

4 Likes
6

Great work Indigo!!!

3 Likes
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First of all, great to see new iAsset coming! On parameters setup, could you just elaborate further about justifications for setting them that way relatively to iETH et iBTC (I put iUSD a bit aside here) ?
Thanks !

1 Like
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Nice proposal. new iAsset new income stream for the Indigo Protocol.

Only thing I question is: how to maintain peg of iSOL?
Are the parameters set-up in a way to stabilize the peg?

2 Likes
9

Let’s goooooo time to increase with good options

2 Likes
10

Love that proposal !

2 Likes
11

Do it :sunglasses:
Let’s get iSOL to Indigo on Cardano
For the people! DAO let’s vote

2 Likes
12

Excited for this! Let’s get it done

1 Like
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Yes. This is very interesting idea. Let’s get it to the voting poll on protocol.

1 Like
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After this period, the DAO owned funds will be held for a period of an additional 30 days in the Indigo Foundation multisig to ensure easy access to rainy day funds in case market dynamics shift unexpectedly and the iSOL Stability Pool needs replenishment. After these 30 days, the funds will be reallocated to the DAO approved Treasury Management structure.

Can this be explained like I’m 5? I don’t quite understand it?

The rewards to support this new iAsset will then shift to 2000 INDY per epoch which will be redirected from INDY stakers allocation for iSOL Stability Pool and Liquidity Providers.

Is it safe to assume since the PWG is assigned with delegating approiate rewards to top dex via TVL, Volume, etc… is this 2000 a hard limit or can it be adjusted before these 30 days are up? How much lewaway are we allowed here?

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Less rewards for INDY stakers? (Less attractive INDY)
Do I get it right?

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To alleviate any concerns, consider that 6k INDY is going to INDY stakers and that was intended to be temporary as it was a result of a rewards rebalancing that ended in a surplus of INDY to direct somewhere and it came at a time where staking yields were quite low. Now that situation appears to have improved dramatically, so we’re suggesting a change.

And as for raw numbers, the last epoch INDY staking HRA from the INDY yield alone was 4.79% of the total HRA figure, so if we redirect 1/3 of that (2k of 6k) per epoch as proposed, we’re only talking about a haircut of 1.6%. We feel this is justifiable for the sake of expanding the iAsset suite and working with the current emissions allocation.

2 Likes
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Sure thing, simply put, the Foundation should hold onto funds for 30days after downturn of POL positions for quick access to rainy day funds in the event the market turns quickly seeing as the pools for iSOL would be relatively new.

To your second part, yes, PWG can suggest any reallocation of rewards emissions however they see fit.

2 Likes
18

I support this proposal!

Would it be possible to partner with the rosen bridge team if their catalyst proposal for bridging solana were to pass in order to try to come up with an idea and bootstrap a iSol/rsSol pool.

Back when iBTC and their bridged btc had a price discrepancy x.com, there seemed to be an opportunity to incentive minting. If these arbitrage opportunities were to come up for iSol minting, would be interesting to have this additional incentive for people to mint iSOL or any other iAssets. Would love to hear your thoughts!