Use SiloDAO’s ETH to mint XAI and seed it to silos

What are you voting for? 1- Authorize the core team to use the ETH deposited in the Development Fund to collateralize ETH and mint XAI. 2- Authorize the core team to deposit minted XAI to select silos. 3- Authorize the core team to rebalance minted XAI among existing and new silos.

The proposal The SiloDAO has previously authorized the core team to use 897 ETH to seed liquidity in the Silo lending protocol. Since, the core team has deployed ~ 450 ETH to different silos. The remainder of ETH sits in our DAO’s development fund.

This proposal is an addendum, authorizing the core team to collateralize the DAO’s ETH to mint XAI. Minted XAI will be seeded into silos. By depositing XAI to select silos and rebalancing deposits among silos, our DAO effectively becomes a market marker.

The promise of making markets serves as a great collaboration tool that we can leverage to attract deposits of base assets and establish relationships with Defi communities. The goal with seeding markets is not to become permanent liquidity provider but to kickstart markets.

To ensure the above, the core team will take the following steps:

• Withdraw ETH from all silos except the cbETH and wstETH silos. These silos are ETH derivatives and ETH serves as a bridge asset for base asset depositors.
• Deposit ETH into the XAI-ETH Bridge Silo.
• Borrow XAI at a safe Collateral Factor (CF) such as 225%. The team will ensure the CF remains above 175%.
• Rebalance XAI among new and existing silos.

It’s important to note that the proposal cannot specify accurate amounts of XAI that we can mint or what silos will receive minted XAI given the many variables at play, including market volatility.

To read more information about the proposal, Check the Discussion link.