Proposal to Adjust DBR Replenishment Rate


This proposal seeks to adjust the DBR replenishment rate from 1,000% to 54.75% APR. The goal is to maintain an effective deterrent for running out of DBR while not being overly punitive, thus encouraging broader adoption of FiRM.


The DBR replenishment rate, expressed in APR, is charged to borrowers when their DBR balance falls to 0 whilst holding an open loan position on FiRM, triggering a replenishment event. If borrowers fall into the replenishment zone, the replenishment rate encourages them to add more DBR to their balance to avoid additional costs.

Borrowers with a continuous DBR deficit will eventually accumulate enough debt in the protocol to be liquidated, unless they terminate their loan or continue to add collateral. The replenishment rate must be higher than the DBR price to act as an effective incentive for borrowers to repay their loans, as it’s a de facto cost ceiling on borrowing in FiRM.


The current DBR replenishment rate stands at 1,000% APR, acting as a significant deterrent for borrowers who may run out of DBR. However, feedback gathered during user studies has suggested that this rate may be too high, renewing earlier concerns that this might be discouraging larger borrowers from using the platform, as their daily costs would be significant if they were to enter the replenishment zone.

If approved, this proposal seeks to enact a new rate of 54.75% APR, or more conventionally 0.15% per day. This rate provides a balance between deterring users from running out of DBR and encouraging adoption while also maintaining a reasonable potential for revenue generation.

Replenishment rate will remain subject to change, should the replenishment rate be too low to be an effective deterrent, or the price of DBR approach it.

Implementing the risk mitigation measures and monitoring activities outlined in the risk assessment produced by the RWG will further help address potential risks associated with reducing the replenishment rate. It is essential to remain flexible and responsive to user feedback and market developments, making further adjustments to the replenishment rate as needed to ensure the platform’s ongoing success.

On-Chain Actions:

  • Set the DBR replenishment rate to 54.75% APR (0.15% per day).