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Proposal to use anDOLA reserve to pay down DOLA bad debt

Executed
#099 - mills ERA

Created Mar 29th, 2023 - Executed Apr 6th, 2023

Details

avatar

CryptoHarry

Proposal to Utilize DOLA Reserves from Frontier's DOLA Market for Accurate Accounting of DOLA Bad Debt

Forum: https://forum.inverse.finance/t/proposal-to-use-andola-reserve-to-pay-down-dola-bad-debt/221

Summary

This proposal seeks to use the DOLA reserves available in Frontier's DOLA market to pay down the DOLA borrow balance of 0xeA0c959BBb7476DDD6cD4204bDee82b790AA1562, which is currently classified as DOLA bad debt. This account’s bad debt accrued as a result of the April 2nd price manipulation incident. This action is primarily an accounting move to provide a more accurate representation of the real DOLA bad debt figure.

Background

The Inverse Finance DAO Treasury is a crucial component of the Inverse Finance ecosystem, as it serves to support the financial stability and growth of the protocol. The anDOLA smart contract currently holds a substantial amount of DOLA reserves in Frontier's DOLA market. You can find a summary of these reserves on our transparency dashboard: https://www.inverse.finance/transparency/treasury. The vast majority (~96%)of the DOLA reserves have accumulated from interest against the current DOLA bad debt positions, rather than from healthy loans.

Motivation

To provide a more accurate representation of the real DOLA bad debt figure, I propose the following steps:

  1. Pull the 105k DOLA from reserves from Frontier's DOLA market (anDOLA smart contract) to the DAO Treasury.
  2. Use the 105k DOLA reserves to pay down part of the DOLA borrow balance of 0xeA0c959BBb7476DDD6cD4204bDee82b790AA1562, reducing the DOLA bad debt figure

Benefits

Implementing this proposal will offer several benefits:

  • Adjusting the DOLA bad debt figure through this accounting move will provide a more accurate representation of the financial health of the Inverse Finance ecosystem, particularly the DOLA stablecoin.
  • By making the real DOLA bad debt figure more transparent, it helps restore trust and confidence among our users and the wider DeFi community.

This proposal presents a clear plan to accurately represent the real DOLA bad debt figure through an accounting move. By taking these steps, we will not only improve the transparency of our ecosystem but also demonstrate our commitment to maintaining a robust and well-managed platform. I urge the community to support this proposal and welcome any feedback or suggestions to improve upon it.

On-Chain Actions

  • reduceReserve’s of the anDOLA Frontier market, by 105,000
  • Give 105,000 DOLA allowance to the anDOLA smart contract
  • repayBorrowBehalf 105,000 DOLA of the account: 0xeA0c959BBb7476DDD6cD4204bDee82b790AA1562

Actions

Action 1
«
Reduce DOLA's Frontier Market Reserves by

105,000

»
anDOLA
._reduceReserves(

105000000000000000000000

)

Action 2
«
Set anDOLA's

DOLA

Allowance to

105,000

»
DOLA
.approve(
anDOLA,

105000000000000000000000

)

Action 3
anDOLA
.repayBorrowBehalf(
0xeA0c...1562,

105000000000000000000000

)

Proof of Reviews

Members allowed to make Drafts can sign the fact that they reviewed the Draft Proposal

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For Votes

4 voters

32.11k votes

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0x759a...f430

27.09k

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CryptoHarry

4.41k

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0x0447...782f

329.81

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0x5e27...84c9

282.26

Against Votes

0 voters

0.00 votes

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