Inverse Finance

This is a large proposal that addresses the following issues:

• Low DOLA liquidity causing peg issues
• Low DOLA borrowing demand
• Low INV liquidity despite Sushi rewards

RATIONALE

The purpose of this proposal is to improve the liquidity situation before Inverse Guard is launched soon after. Inverse Guard is a risk product. Therefore, potential users of Inverse Guard will take risk factors such as DOLA liquidity and peg stability in consideration to make the decision to trust our cover product for long coverage durations. Since INV may act as a backstop for DOLA in an unlikely scenario of extreme DOLA insolvency, INV liquidity should also be considered vital to DOLA’s health.

ACTIONS

1. Add DOLA-3pool Curve LP as collateral-only asset to Anchor (borrowing disabled) with a 70% collateral factor
2. Add INV-DOLA SLP as collateral-only asset to Anchor (borrowing disabled) with a 70% collateral factor
3. Set a reward rate of 600 INV per month for supplying DOLA-3pool to Anchor
4. Set a reward rate of 500 INV per month for supplying INV-DOLA to Anchor
5. Increase collateral factors of DOLA, ETH, WBTC, YFI, stETH and xSushi to 70% and xINV to 60%
6. Whitelist DOLA Fed contract for Fuse Pool 6 as a DOLA minter
7. Reduce xINV reward rate to 1250 INV per month
8. Reduce xINV withdrawal delay to 10 days