Forum Link: https://forum.inverse.finance/t/proposal-to-add-sdola-scrvusd-convex-lp-market-to-firm/517

Summary

This proposal seeks to integrate the sDOLA/scrvUSD Liquidity Pool Token (LPT) from Curve Finance as a collateral asset on FiRM, Inverse Finance’s fixed-rate lending protocol. The sDOLA/scrvUSD LP offers unique advantages due to its stable composition and inclusion of two yield-bearing stablecoins, providing a new opportunity for capital-efficient lending. This market will leverage a fork of the current ALE LP Helper to convert between sDOLA and DOLA for single-sided additions to the pool. The integration aligns with FiRM’s strategic goals of diversifying supported collateral and increasing sDOLA’s utility.

Background

scrvUSD is yield-bearing crvUSD, a decentralized stablecoin native to the Curve Finance ecosystem designed with advanced stabilization mechanisms to maintain its peg to the USD. Utilizing Peg Keeper contracts, oracles, and a dynamic monetary policy, crvUSD ensures stability and resilience. Peg Keepers actively mint or burn crvUSD tokens to balance liquidity pools and keep the price near $1. Additionally, the protocol adjusts interest rates on crvUSD loans to dynamically influence supply and demand. The recent introduction of scrvUSD, developed in collaboration with Yearn Finance and powered by its V3 vault infrastructure, expands crvUSD’s utility by providing a low-risk, yield-bearing alternative.

sDOLA, a tokenized representation of staked DOLA, increases the utility of DOLA by allowing holders to earn yield while participating in liquidity strategies. By integrating sDOLA/scrvUSD LP as collateral, FiRM enables liquidity providers to leverage their positions, deepening DOLA’s ecosystem and fostering protocol efficiency.

Risk Assessment

As this is a derivative market of the DOLA/scrvUSD LP market, no new risk assessment is required. The RWG confirms that the existing risk work for the DOLA/scrvUSD market, including oracle and price feed considerations, is applicable here. The ALE mechanism will include a conversion of sDOLA to DOLA, ensuring compatibility with existing processes.

On-Chain Actions

• Add sDOLA/scrvUSD LP Convex Market to DBR contract
• Set borrowController of Market to new FiRM BorrowController
• Set market supply ceiling to 10,000,000 DOLA
• Set daily limit in BorrowController to 1,000,000 DOLA
• Set Collateral Factor to 90%
• Set Liquidation Factor to 100%
• Set Liquidation Incentive to 5%
• Approve sDOLA/scrvUSD LP Convex market on the DBR Helper
• Set Minimum Debt Amount in BorrowController to 3,000 DOLA
• Set stalenessThreshold for sDOLA/scrvUSD Convex LP market to 86460
• Set FiRM Oracle price feed for sDOLA/scrvUSD Convex LP to the deployed DOLA/scrvUSD custom LP tokenPriceFeed contract
• Add sDOLA/scrvUSD LP Convex Market to ALE
• Add DOLA/scrvUSD LP Convex Market to new CurveDolaLPHelper