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Alpaca FinanceAlpaca Financeby0xD428eD5e23d58726217Fc27352bbD51E098063200xD428…6320

[AIP-9] Deposit Liquidation Treasury Funds into Lending Pools while waiting to be used for buyback

Voting ended over 3 years agoSucceeded

Summary:

Deposit a portion of liquidation treasury funds into Alpaca lending pools while waiting to be used for buyback

Motivation / Rationale:

Liquidation treasury can build up to high value after a big market move, such as now. (mostly in stablecoins) sitting in the liquidation treasury. By depositing a portion of them in the lending pools, liquidation treasury can earn roughly $70 per day (using the current APRs for each stablecoin), and increase the TVL of our protocol by almost $1 million.

This proposal does not require any development effort, while providing a small increase in TVL and daily income to grow the liquidation treasury. It will also marginally reduce interest rates especially for low liquidity coins like USDC, which may also encourage more LYF users, further increasing TVL.

This strategy incurs small additional risks vs. just holding the fund. If bad debt occurs in the lending pools, the principle for buyback will be reduced.

Implementation:

  • Deposit all stablecoins in liquidation wallet (minus the required amount for current’s week buyback) into the lending pools
  • Stake ibTokens for ALPACA rewards which will be used for additional burn
  • Withdraw the necessary amount for buybacks at the end of each week
  • At the end of each week, withdraw the necessary amount for the planned buyback of the following week, taking into account leftover stablecoins or new liquidation funds in the treasury. If there is a surplus, deposit the surplus stable coins into the lending pools and stake the ib tokens.
  • The same can be done with crypto such as BNB, ETH and BTC if the market picks up again and shorts are liquidated

Voting:

This proposal will be a simple YES or NO vote.

YES would start implementing the plan above while NO would keep the fund in the liquidation treasury as is.

Off-Chain Vote

YES - deposit in lending pools
18.26M xALPACA96.9%
NO - keep the fund as is
580.48K xALPACA3.1%
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Discussion

Alpaca Finance[AIP-9] Deposit Liquidation Treasury Funds into Lending Pools while waiting to be used for buyback

Timeline

Jun 29, 2022Proposal created
Jun 29, 2022Proposal vote started
Jul 01, 2022Proposal vote ended
Oct 26, 2023Proposal updated