RFP-15: Adding ARB as a Full Collateral and Borrow Market on Arbitrum

Abstract

RFP-15 looks to add $ARB (Arbitrum Governance Token) from the Arbitrum Foundation as a full collateral and borrow market to the Arbitrum deployment of Radiant Capital.

https://arbitrum.foundation/

Motivation

Radiant Capital aims to provide a decentralized platform for lending and borrowing cryptocurrencies, offering users an efficient and secure means to access financing and generate yields. As the cryptocurrency market evolves, it is essential to expand the platform's offerings by incorporating new, high-quality assets as collateral and borrowing options.

The objective of this governance proposal is to seek approval for the integration of ARB as an accepted form of collateral and as a borrow market within the Arbitrum deployment of Radiant Capital.

The ARB token launched in March and will be the governing token for the Arbitrum ecosystem. As the #1 TVL money market deployed on Arbitrum, Radiant is a natural venue for lending and borrowing of ARB. We commend the Arbitrum Foundation’s commitment to work towards entirely on-chain executed governance, and are supportive of the vision that they look to achieve.

ARB is currently undergoing evaluation from the Risk Committee. Given ARB does not exist on highly liquid money markets yet, and given its volatile profile, it will launch with conservative parameters (Max LTV, Liquidation threshold) and will evolve as the market matures.

Key Terms

• ARB - Arbitrum Token (https://arbitrum.foundation/)

• Max LTV - The Maximum LTV ratio represents the maximum borrowing power of a specific collateral. For example, if a collateral has an LTV of 75%, the user can borrow up to 0.75 worth of ETH in the principal currency for every 1 ETH worth of collateral.

• Liquidation Threshold: This represents the threshold at which a borrow position will be considered undercollateralized and subject to liquidation for each collateral. For example, if a collateral has a liquidation threshold of 80%, it means that the position will be liquidated when the debt value is worth 80% of the collateral value.

Specifications

• Add ARB as a full collateral and borrow market (ERC-20)

• Max LTV: Pending Risk Committee Review

• Liquidation Threshold: Pending Risk Committee Review

• Scale allocation points (incentive emissions) for lend and borrow markets depending on demand over a two-week period, at which point AP will be stabilized

Steps to Implement

• Add ARB as a collateral and borrow market with parameters determined by the Radiant Risk Committee

Overall Cost/Impact

• Minimal

Timeline

• Immediate effect, pending local testing success

Voting

• In Favor: Supportive of RFP-15, adding ARB to the Arbitrum deployment of Radiant, pending review from Risk Committee on parameters

• Against: Against implementation of the RFP-15 proposal

• Abstain: Undecided, but contributing to quorum