MIR-7┃Add SUSHI as collateral on Mimo on Polygon

Summary: This proposal aims to add SUSHI as new collateral on Mimo on Polygon.

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 $843M through liquidity pools and lending on 15 different chains thanks to the Liquidity Mining incentive. They have also integrated a crosschain 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 : SUSHI Token contract address : https://polygonscan.com/token/0x0b3f868e0be5597d5db7feb59e1cadbb0fdda50a Audit(s) links : 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 : Polygon Relation with the project : None. Website: https://sushi.com/ Twitter : https://twitter.com/sushiswap Discord : https://discord.com/invite/NVPXN4e

Token metrics & Risk assessment:

Smart Contract risk: B The code has 2 audits from Quantstamp and Peckshield. Sushiswap has $852,3M 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 4,4M transactions since its launch on Polygon in March 2021.

Counterparty risk: B+ Sushiswap launched on Ethereum in September 2020 on Ethereum 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, so, the team can't mint token and the maximum supply can't be changed. There are currently 33,8k holders on Polygon.

Market Risk: C The token is available on top exchanges with nearly $300M market cap with a daily volume of $30k on Polygon although a large share of SUSHI’s supply is staked. The liquidity available on Polygon is nearly $150k.

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

Liquidity Risk of PAR on Polygon: A- The PAR-USDC UniV3 pool has 632K$ in concentred liquidity, composed of 20% PAR and 80% USDC at the time of writing. The 2eur Curve pool has 910k$ in liquidity, composed of 52,76% PAR and 47,24% jEUR at the time of writing. The 4eur Curve pool has 762k$ in liquidity, composed of 19,28% PAR, 18,09% jEUR, 39,89% EURS and 22,74% EURT at the time of writing. The MIMO-PAR Balancer pool has 172k$ in liquidity, composed of 80% MIMO and 20% PAR.

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

• 1000 USDC → PAR: 0.06%
• 10000 USDC → PAR: 0.13%
• 25000 USDC → PAR: 0.25%
• 50000 USDC → PAR: 0.44%

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

Community size :

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

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

Voting options:

• Add SUSHI as new collateral on Mimo on Polygon
• Against adding SUSHI as new collateral on Mimo on Polygon
• Abstain

Authors: Starny & Jean Brasse from Mimo Labs