PIP-54 l Sunset paUSD, the Parallel V2 USD Stablecoin

Summary: The proposal aims to sunset paUSD, the Parallel V2 Stablecoin.

Context: Following the launch Parallel V3 & USDp, and with its recent milestone of $2M in TVL & supply. With a current net paUSD supply of ~20k tokens we believe that time has come to sunset paUSD, the Parallel V2 Stablecoin.

Rationale: We propose to:

• Reduce debt ceiling of all assets allowed as collateral to 0 (apart from USDC)
• Increase borrow rate of all assets allowed as collateral to 50% per year (apart from USDC)
• Adjust USDC collateral parameters on Ethereum & Polygon:
• Minimum Collateral Ratio: 100.50%
• Liquidation Ratio: 100.50%
• Liquidation Fee: 0.00%
• Liquidation Bonus: 0.20%
• Initiation Fee: 0.20%
• Borrow Rate (per year): 0.00%
• Debt Limit: 10,000,00 paUSD

Adjusting these parameters in this way for USDC in Ethereum & Polygon will allow users having debt in paUSD to mint tokens for a 0.5% fee and repay their debt without having to rely on secondary market liquidity.

We also propose to reduce paUSD Protocol-Owned-Liquidity on Ethereum in paUSD/GYD to $10k and on Polygon in paUSD/USDC to $10k. This will ensure a constant liquidity for users to repay their debt.

Moreover, paUSD currently held in VaultsCore will be withdrawn and sold on the market to allow users to repay their debt.

Means:

• Human Resources: Multisig signers will need to sign transactions to execute the proposal
• Treasury Resources: No treasury resources needed.

Technical implementation:

• On Ethereum, the DAO Multisig will:
  • For each collateral (except for USDC), in the ConfigProvider contract, call ‘setCollateralDebtLimit’ with these parameters:
    • _collateralType: collateral address
    • _debtLimit: 0
  • For each collateral (except for USDC), in the ConfigProvider contract, call ‘setCollateralBorrowRate’ with these parameters:
    • _collateralType: collateral address
    • _borrowRate: 1000000012857214317438491660 (50.00% p.y)
  • In the ConfigProvider contract, call ‘setCollateralConfig’ with these parameters:
    • _collateralType: 0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48 (USDC)
    • _debtLimit: 10000000000000000000000 (10,000.00)
    • _liquidationRatio: 1005000000000000000 (100.5%)
    • _minimumCollateralRatio: 1005000000000000000 (100.5%)
    • _borrowRate: 0 (0.00% p.y)
    • _originationFee: 2000000000000000 (0.20%)
    • _liquidationBonus: 2000000000000000 (0.20%)
    • _liquidationFee: 0
  • In the Vaultscore contract, call the ‘withdrawStableX’ function with these parameters:
    • _amount: 1000000000000000000000 (1,000.00)
• On Polygon, the DAO Multisig will:
  • For each collateral (except for USDC), in the ConfigProvider contract, call ‘setCollateralDebtLimit’ with these parameters:
    • _collateralType: collateral address
    • _debtLimit: 0
  • For each collateral (except for USDC), in the ConfigProvider contract, call ‘setCollateralBorrowRate’ with these parameters:
    • _collateralType: collateral address
    • _borrowRate: 1000000012857214317438491660 (50.00% p.y)
  • In the ConfigProvider contract, call ‘setCollateralConfig’ with these parameters:
    • _collateralType: 0x3c499c542cEF5E3811e1192ce70d8cC03d5c3359 (USDC)
    • _debtLimit: 10000000000000000000000 (10,000.00)
    • _liquidationRatio: 1005000000000000000 (100.5%)
    • _minimumCollateralRatio: 1005000000000000000 (100.5%)
    • _borrowRate: 0 (0.00% p.y)
    • _originationFee: 2000000000000000 (0.20%)
    • _liquidationBonus: 2000000000000000 (0.20%)
    • _liquidationFee: 0
  • In the Vaultscore contract, call the ‘withdrawStableX’ function with these parameters: _amount: 1000000000000000000000 (1,000.00)

Voting options:

• For the Sunset of paUSD
• Against / Rework the Proposal
• Abstain

Author(s): Jean Brasse from Mimo Labs