Proposal to Add sDOLA/scrvUSD Yearn LP Market to FiRM

FiRM
1

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, aligned with Yearn’s autocompound strategy, introduces sDOLA to FiRM’s collateral ecosystem. Leveraging a forked ALE LP Helper, this market will allow for seamless single-sided additions via sDOLA, enhancing both yield and liquidity efficiency.

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

This market shares risk characteristics with the DOLA/scrvUSD Yearn LP market. The RWG confirms that existing risk assessments and parameters are valid. The ALE LP Helper will be forked and modified to support sDOLA pools, maintaining consistency with established risk frameworks.

On-Chain Actions

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