This is case of FREE leverage!
Until we implement time dependent CDP fees, depeg will have wide range and continuity.
At this moment, levereging @indigo costs 2% (burning fee), but if CDP is not burnet, it can stay open for ever and we have free leverage tool. (That is not a norm of industry!)
-You may take a look, how much it costs to borrow in other protocols.
I would suggest to implement something like following…
if CDP is burned in first 40 epochs from minting, collects 2% fee for stINDY.
if CDP is held open after 40 epochs from minting, additionall 0.05% fee every epoch is reserved from collateral and CDP’s CR is decreasing.
additionall fee will not influence debt amount which is deposited in SP!
to lower additionall fee, you should stake INDY!
Dicsount = (stINDY / total stINDY) / (iDEBT / total iDebt)
Maximum discount should not exceed 100% of additional fee.
Do I have to list all benefits from implementing this kind of fee structure?
***fees must be higher that mentioned above (look at market average and stay competitive)