Hello Serum Community, Cooper, Head of Ecosystem Strategy at Ratio Finance here with a proposal that will boost stablecoin adoption on Serum.
Serum DAO Grant Proposal
An investment to boost stablecoin adoption on Serum
Ratio Finance is a Quantitative Risk Assessment Platform built on Solana. Its first product is an over-collateralized stablecoin (USDr) which is backed by stable-stable LP tokens that are redeployed into their corresponding yield farms for self-paying leverage. Ratio’s mainnet beta is launching by April 10th, 2022.
Ratio’s vision is to de-risk DeFi using quantitative and qualitative risk metrics and credit risk modeling to build cutting edge stablecoin-based, risk-adjusted financial products enabled by the Ratio Risk Rating system, which is a Moody’s style risk label ranging from AAA to F. The higher the creditworthiness of the collateral, the higher the rating.
Ratio is committed to being a leader in the space and prioritizes partnerships that will strengthen the Solana ecosystem. Ratio celebrates transparency, thoroughly considers risk, and shares in the success of its users.
Ratio appreciates and respects the ecosystem Serum DAO has created and recognizes its significance in the crypto space. Ratio believes that together as partners Ratio and Serum could shape the future of Solana’s stablecoin ecosystem. We see this grant proposal as a critical first step in achieving that shared vision.
In short, this grant proposal is requesting SRM to be used for farming rewards on the USDr-USDC stable-stable pool on Atrix. We understand that Atrix is leveraging Serum to become a leader in the stable swap ecosystem, and Ratio is building its stablecoin atop high-quality stable-stable LP from AMMs including Atrix. As Atrix grows so too does Serum, and Ratio is positioned to accelerate Atrix’s growth in the stablecoin space. If accepted, this grant proposal will kick off a positive feedback loop of growth for Serum, Atrix, and Ratio; as Atrix stablecoin TVL grows, Ratio is able to provide better derivative financial products, which in turn increases demand for Atrix and Serum.
This proposal is for SRM rewards for the USDr-USDC (USDr is Ratio’s stablecoin) pool on Atrix. Doing so will help fuel Ratio’s growth, which will in turn boost stablecoin TVL on Atrix and activity on Serum’s orderbook. The details of the proposed grant are below.
The keystone of the grant will be the Serum DAO allocating 500k SRM Emissions towards the USDr/USDC Serum pool hosted on Atrix over the next 3 months. In addition to the benefits mentioned above, it also further incentivizes the growth of all the stable-stable Serum pools hosted on Atrix. Because USDr can only be minted against stable-stable LP, and the SRM rewards would go towards the USDr-USDC pool, the only way for users to earn SRM rewards would be to first provide liquidity to other stable-stable pools on Atrix.
An additional note: in an effort to responsibly scale USDr in the first few weeks after launch, we will have manually-controlled ceilings on the amount of USDr that can exist That being the case, we would work with Atrix to have SRM rewards scale with the float of USDr over the course of the 3 month emissions period.
A few actions will go hand in hand with the passing of this proposal that will strengthen the relationship between Serum and Ratio. For one, Ratio will move its development efforts towards building on Serum-powered LPs to provide both capital efficiency and clear risk visualization & mitigation to the benefit of Serum. Moreover, Ratio will onboard all stable-stable LP tokens on Atrix onto its platform, with a commitment to doing the same for future Serum-powered LP tokens. Ratio believes this proposed grant is the first step in a very fruitful relationship between Serum DAO and Ratio.
We greatly appreciate your consideration and look forward to hearing from the SerumDAO community.