Aggregate FUSE borrowing markets

FORUM DISCUSSION https://forums.rari.capital/d/108-concept-and-implementation-proposal-fuji-borrowing-aggregator-for-fuse

SUMMARY FujiDAO proposes to develop a dedicated borrowing aggregator that will serve exclusively Fuse pools. Rari's users will be able to borrow specific assets at the best rate available across selected pools.

We are ready to invest significant efforts and human resources to build this integration and we apply for a Rari Capital DAO grant to partially fund its two initial stages.

BACKGROUND We built the first borrowing aggregator which aims to optimize loan expenses for DeFi users. The protocol achieves this by constantly monitoring borrow markets and whenever there is a better rate, it automatically refinances the whole pool of debt with a flashloan.

We create vaults where users deposit a single asset as collateral and borrow against it another asset. For example, in the ETH/DAI vault, users deposit ETH and borrow DAI. Thus, isolating debt positions allows for better risk management and the most effective interest rate optimizations.

When users borrow from a Fuji vault, the needed liquidity gets sourced directly from the base protocol proposing the best rate. When market conditions change and there's a provider with a lower borrow rate for a certain asset, the protocol triggers a rebalance operation and refinances the whole position of the vault. In that way, users instantaneously get a better rate on their loans without the need to take any action on their side.

MOTIVATION Rari Fuse is a set of Compound-like pools that offers a big choice of assets and a horizontal diversification of risk. It gives a great flexibility for creation of highly customizable pools but this comes at the cost of fragmenting liquidity. That’s why, we believe we can answer to some extent to this challenge by plugging Fuji’s vaults engine and thus forming the vertical axis of Fuse markets.

ADDITIONAL DETAILS The proposed work requires good coordination from both sides and we suggest going step-by-step by establishing milestones and regularly evaluating them.

Stage 1:

• creation of Fuji instance: smart contracts, refinance bot
• aggregation of one pair across two pools: ETH as collateral, DAI as borrow asset
• Rari's dev team validates what's already done in order to continue to stage 2
• timeline: 2-3 weeks

Stage 2:

• aggregation of two more pairs across two/three pools
• liquidation bot
• timeline: 2-3 weeks

GRANT 6000 USDC or RGT equivalent due after successful completion of stage 2

VOTING

• For: Approve development of Fuji borrowing aggregator for Fuse pools.
• Against: Reject development of Fuji borrowing aggregator for Fuse pools.