Proposal: Stablecoin Peg Protection with Risk Harbor

We propose enabling Risk Harbor's Stablecoin Peg Protection as an available ICHI strategy.

What? Risk Harbor (RH) announced a Stablecoin Peg Protection for Stable UNI on 10/19/21. It enables users to purchase coverage on RH's platform providing additional mitigation against the risk of depegging. Additionally, Risk Harbor allows users to underwrite Stable UNI with USDC and earn rewards. With additional ICHI Branded Dollars planned to launch with Stablecoin Peg Protection, ICHI should admit a strategy that enables Branded Dollars to deposit a share of their collateral into the Risk Harbor Protection pool to cover themselves and earn yield.

Why? The availability of coverage enables people to pay to protect the stability of their assets. This reduces risks and increases TVL. In addition, the ICHI treasuries can earn yield by providing coverage for their own peg.

What are the drawbacks?

• There is a risk of complete loss of any funds supplied to the Risk Harbor protocol. This could happen via a hack/exploit, governance attack, or rug pull.
• There is a risk that it could delay withdrawals from ICHI treasuries. If someone makes a claim, underwriting funds will be locked until a certain expiration date before being able to be withdrawn.

Mitigation of Drawbacks: We will cap coverage provision to 10% of a Stable Asset's collateral reserves.

Yes - Approve Risk Harbor Coverage as an ICHI Strategy No - Do Nothing