Summary

This improvement proposal aims to form a strategic partnership with Finance Ventures, allowing the “VWMBp” token to be integrated into the Hifi Protocol as collateral. The intent is to facilitate Finance Ventures’ ability to extend credit to its borrower, Kevin Bradburn, using Hifi Protocol’s DeFi infrastructure, with a collateral ceiling of 10 VWMBp token, a fixed oracle value of $65,000 USD per VWMBp Token, and a 125% collateralization ratio (80% loan-to-value). Valuation can be found here.

The VWMBp Token is a digital representation of an extremely valuable vintage Volkswagen Microbus. Finance Ventures will be originating a loan to the owner using the vehicle as collateral. Capital for the loan will be sourced from the Hifi Lending Protocol. The VWMBp token cannot be liquidated on-chain, but if the borrower defaults there are provisions in the contract for liquidation of the real-world asset.

Details

Under the proposed Agreement of Association, Hifi DAO will enable Finance Ventures to leverage the Hifi lending protocol by utilizing the VWMBp Token as collateral to secure credit represented by hTokens.

As per the agreement’s conditions, there will be a collateral ceiling of 10 VWMBp tokens, which will have a fixed oracle value of $65,000 USD per VWMBp Token, and a 125% collateralization ratio. The collateral ceiling is set as a cap on the credit extended to Finance Ventures in this agreement.

Upon this proposal’s success, Hifi DAO will execute the necessary variable changes to the Hifi Protocol’s Fintroller. Hifi DAO will also enter into a legally binding Agreement of Association with Finance Ventures which can be viewed here.

To safeguard Hifi DAO’s interests, Hifi DAO will designate Mainframe Group Inc. to monitor Finance Ventures’ monthly financial updates. Finance Ventures is required to comply with specific loan eligibility criteria to ensure only high-quality loans are financed, and they must also provide regular monthly reports.

In case of a default by Finance Ventures’ borrower, an explicit collateral liquidation process is in place to ensure the recovery of the outstanding hTokens. More information about Hifi’s framework can be found on the blog, here.

Benefits

Expanding Hifi’s Utility: The partnership with Finance Ventures and integration of a real-world asset, with a defined collateral ceiling, showcases the utility of the Hifi lending protocol in facilitating credit extension for real-world assets while managing risk.

Establishing Strategic Partnerships: The partnership with Finance Ventures allows Hifi DAO to expand its reach and engagement within the DeFi sector and traditional finance.

Risk Management: By establishing a collateral ceiling and a fixed oracle value, the proposal provides a balanced risk management approach while ensuring transparency and stability.

Voting

To approve the proposal, facilitating Finance Ventures to extend credit to its borrowers via Hifi protocol with the specified collateral ceiling and fixed oracle value.

To disapprove the proposal, maintaining the current operational status of Hifi DAO.

Effect

Upon majority approval, Hifi DAO will execute the partnership agreement with Finance Ventures and take the necessary technical steps to integrate VWMBp Token into the Hifi Protocol with the set collateral ceiling and fixed oracle value.

If the majority vote disapproves, no further action will be taken regarding this proposal.

It is recommended that DAO members review the full agreement for a comprehensive understanding before casting their votes.