Summary

This proposal aims to establish a new interest rate adjustment mechanism for Lista DAO to enhance adaptability to market changes and promote platform stability and growth. The new mechanism will follow a structured, tier-based approach for future interest rate adjustments.

Abstract

The proposal focuses on three key aspects. First, interest rate adjustments will follow a tiered method, which organizes assets into specific categories (tiers) for better rate management. Second, if the interest rate adjustment falls within a 1% range, no separate proposal will be required to address rapid market changes. Third, the gradual implementation of AMO (Automated Market Operations) will be proposed with specific parameters once stability is achieved. The overall implementation process will include updates to the relevant smart contracts and front-end interfaces to accurately reflect the new tier-based interest rate adjustment mechanism.

Motivation

Enhanced Adaptability

• Current Problem: The existing interest rate mechanism may not be flexible enough to respond quickly to market changes, potentially affecting the platform's competitiveness and user experience.
• Proposed Solution: Implement a tier-based interest rate adjustment mechanism that will allow the platform to react more effectively to market fluctuations.

Value-Add

• Market Responsiveness: The new tiered structure will enable Lista DAO to quickly adjust interest rates across different asset classes, maintaining competitiveness in the DeFi space.
• User Satisfaction: A more dynamic interest rate system will improve the borrowing and lending experience for users, increasing retention and satisfaction.

Specification

Interest Rate Adjustment Mechanism

1. Tier-based adjustments: Interest rates will be adjusted according to a defined tier system to ensure clear guidelines and structured rate management. The tiers are defined as follows:
   • Tier 0: Stablecoins, such as USDT, FDUSD.
   • Tier 1: Native tokens, such as BNB, ETH, BTC.
   • Tier 2: Well-known staking tokens, such as slisBNB, wstETH, wBETH.
   • Tier 3: Innovation zone assets. Adjustments will be made based on these tiers, and any special circumstances will require a separate proposal.
2. Adjustments within a 1% range: If an interest rate adjustment is within a 1% range, it will be considered minor, and no separate proposal will be required. This will allow for faster responsiveness to short-term market changes without unnecessary administrative steps.
3. AMO Promotion: AMO (Automated Market Operations) will be gradually implemented. After reaching stability, specific parameters and further details will be proposed to fully integrate AMO into the system.

Future interest rate adjustments will strictly follow this tier-based structure to provide a consistent and transparent approach for rate changes.

Benefits (Pros)

1. Increased Flexibility: By categorizing assets into tiers, the platform can adjust interest rates more rapidly and effectively, matching the needs of each asset class in response to market changes.
2. Enhanced User Experience: Users will benefit from a more responsive interest rate mechanism that ensures fair and competitive borrowing and lending conditions.
3. Market Competitiveness: With the ability to adjust rates dynamically based on asset class and market conditions, Lista DAO will be better positioned to compete in the fast-evolving DeFi space.

Downsides (Cons)

• Proposal Complexity: If an interest rate change exceeds the 1% threshold or falls outside the scope of the tiered guidelines, a separate proposal will be required, potentially adding administrative complexity.

Voting

• Yes: Approve the proposed tier-based interest rate adjustment mechanism and implement the changes.
• No: Reject the proposal and maintain the current interest rate structure.

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Interest Rate Adjustment Mechanism

1. Tier-based adjustments: Collateral assets will be categorized into specific tiers, and future interest rate changes will be aligned with this tier system. This approach will enhance the management of borrowing rates by applying adjustments based on the characteristics and risk profile of each tier of assets. The tiers are defined as follows:

   Tier 0: Stablecoins, such as USDT, FDUSD.

   Tier 1: Native tokens, such as BNB, ETH, BTC.

   Tier 2: Well-known staking tokens, such as slisBNB, wstETH, wBETH.

   Tier 3: Innovation zone assets.

Adjustments will be made within each tier to ensure more precise control over borrowing rates and risk management. In the case of special circumstances, a separate proposal will be submitted.