MIR-16┃Add xSUSHI as collateral on Mimo on Ethereum

Summary: This proposal aims to add xSUSHI as new collateral on Mimo on Ethereum.

Rationale : SushiSwap is a decentralized exchange fork of Uniswap and it is part of the top DEX. It performed a vampire attack which attracted a lot of users and its TVL is now $404M through liquidity pools and lending on 15 different chains thanks to the Liquidity Mining incentive. They have also integrated a cross-chain swap across their chains and liquidity.

The SUSHI governance token can be staked into xSUSHI which will receive 0,05% of rewards fees from all trades. When users make trades on the SushiSwap Exchange a 0,3% fee is charged, 0,05% (1/6th of the fee) is added to the SushiBar pool in the form of LP tokens for the relative pool. When the rewards contract is called, all the LP are sold for SUSHI then divided up proportionally between the xSUSHI holders

You can learn more about SushiSwap in their documentation.

Once the vote is accepted on Snapshot, we will determine the associated liquidation ratio, minimal collateral ratio, debt ceiling and liquidation bonus in a second MIR discussion.

• Project Presentation:
• Protocol name : SushiSwap
• Token requested : xSUSHI
• Token contract address : https://etherscan.io/token/0x8798249c2E607446EfB7Ad49eC89dD1865Ff4272
• Audit(s) SUSHI :
• Quantstamp https://github.com/quantstamp/sushiswap-security-review
• Peckshield https://github.com/peckshield/publications/blob/master/audit_reports/PeckShield-Audit-Report-SushiSwap-v1.0.pdf
• Chain requested : Ethereum
• Relation with the project : None.
• Website: https://sushi.com/
• Twitter : https://twitter.com/sushiswap
• Discord : https://discord.com/invite/NVPXN4e

Token metrics & Risk assessment:

(We take into account the data of SUSHI instead of xSUSHI because there is no cooldown to unstake and can be redeemed at 1:1, the changes will be mainly in the collateral parameters)

Smart Contract risk: A- The code has 2 audits from Quantstamp and Peckshield. Sushiswap has $404M total value locked on various chains and has more than $200B of cumulative volume and Liquidity Provider earned nearly $565M of fees. SUSHI has generated more than 3,2M transactions since its launch on Ethereum.

Counterparty risk: A- Sushiswap launched on Ethereum in September 2020 and is now among the top DEX in the market. Sushi is a permissionless blockchain protocol where token holders vote on incentives and upgrades. Anyone can create new Sushi markets. There is no mint function in the Token smart contract, it means that the team cannot mint tokens and the maximum supply can't be changed. There are currently 100k holders on Ethereum.

Market Risk: D The token is available on top exchanges with nearly $228M market cap with a daily volume of $1,5M on Ethereum although a large share of SUSHI’s supply is staked. The liquidity available on Ethereum is nearly $17M.

Chain Risk : A Ethereum had 0 outages over the last 6 months. (https://etherscan.com/chart/blocks)

Liquidity Risk of PAR on Ethereum: A- The PAR-USDC UniV3 pool has 1,68M$ in concentrated liquidity, composed of 50% PAR and 50% USDC. The PAR-USDC Curve pool has 425k$ in liquidity, composed of 52,1% PAR and 47,9% USDC at the time of writing. The MIMO-PAR Balancer pool has 310k$ in liquidity, composed of 80% MIMO and 20% PAR.

This provides the following price impact on the following trade sizes:

• 1000 USDC → PAR: 0.00%
• 10000 USDC → PAR: 0.03%
• 25000 USDC → PAR: 0.07%
• 50000 USDC → PAR: 0.14%

Overall Risk : B The Overall Risk is the average of the points mentioned above.

Community size :

• Twitter: 225,1k followers
• Discord: 74k members

Means:

• Human resources: Multisig DAO signers will need to sign and execute transactions to add xSUSHI as collateral on Mimo.
• Treasury resources: There is no cost for the treasury to add xSUSHI on Mimo Ethereum.

Technical implementation:

• Add xSUSHI in the ConfigProvider Contract with all parameters decided by the Mimo governance.
• Set the chainlink oracle related to the xSUSHI: xSUSHI/USD into PriceFeed Contract

Voting options:

• Add xSUSHI as new collateral on Mimo on Ethereum
• Against adding xSUSHI as new collateral on Mimo on Ethereum
• Abstain

Authors: @starny & @JeanBrasse from Mimo Labs