Radiant Capital

Abstract

RFP-32 seeks approval from Radiant DAO stakeholders for the planned deprecation of DAI as a supported asset in Radiant’s money market on the Arbitrum chain. This proposal is in response to the observed stagnation and limited utility of the DAI market within our platform on Arbitrum.

Motivation

The decision to propose the deprecation of DAI in Radiant’s Arbitrum money market is underpinned by several key observations and data-driven insights:

1. Declining Reserve Value: Since the launch of Radiant v2 in March 2023, there has been a notable decline in DAI’s cumulative reserve value within Radiant. The reserve value has decreased from $26M to $2.48M, reflecting a significant drop in its utilization and relevance in our ecosystem.

2. Comparative Market Share: The current reserve value of DAI constitutes only about 0.54% of our total reserve markets. This minimal share further emphasizes its dwindling significance in comparison to other assets in our portfolio.

3. Decreased User Relevance: The usage trends and feedback indicate that unstaked DAI has become increasingly irrelevant to our user base. This shift in user preference and activity underscores the need for a strategic realignment of our asset offerings.

4. Resource Optimization: By phasing out DAI, Radiant can redirect its resources and focus toward markets that demonstrate higher activity and growth potential. This realignment is crucial for staying responsive to the changing demands of our users and maintaining a competitive edge in the dynamic DeFi landscape.

This proposal seeks to proactively adapt to these market changes, ensuring that Radiant’s offerings align with the interests and needs of our community while contributing to the protocol’s overall efficiency and growth.

Key Terms

• Allocation Points (AP): Parameters typically used in DeFi protocols to determine the distribution of incentives for depositing or borrowing specific assets. Reducing allocation points to zero effectively removes incentives for that asset.

• DAI: A decentralized, collateral-backed stablecoin soft-pegged to the US Dollar, developed by MakerDAO.

• Deprecation: The process of phasing out a feature or service, typically involving its gradual removal or replacement.

Specifications

Actions for DAI Market

• Remove Allocation Points: Set the allocation points for DAI to zero, effectively removing any incentives for depositing or borrowing DAI.

• Withdrawal Only: Transition the DAI market to a “withdrawal only” state, allowing users to withdraw their existing DAI holdings.

• Market Monitoring: Continuously monitor the market to ensure a smooth transition during the deprecation phase.

Final Removal Steps

• Communication and Notifications: Inform users about the deprecation timeline and procedures for withdrawing their DAI holdings.

• Protocol Adjustments: Make necessary updates to the Radiant protocol on Arbitrum to remove DAI from the list of supported assets.

Steps to Implement

1. Initial Announcement: Communicate the decision to deprecate DAI on Arbitrum to the Radiant community.

2. Adjust Allocation Points: Implement system changes to set DAI’s allocation points to zero.

3. Enable Withdrawal Only Mode: Transition DAI to a “withdrawal only” state.

4. Monitor Withdrawals: Oversee the withdrawal process, ensuring stability and user support.

5. Final Removal: Coordinate the complete removal of DAI from Radiant’s supported assets on Arbitrum in alignment with the proposed timeline.

Overall Cost/Impact

• User Impact: Users will need guidance on withdrawing their DAI holdings and understanding alternative options within Radiant.

• System Impact: Technical adjustments to the Radiant protocol on Arbitrum.

• Costs: Expected to be minimal, primarily involving internal resource allocation for communication and technical updates.

Timeline

• Announcement and Cessation of New Activities: Immediately following ratification.

• Withdrawal Phase and Monitoring: Over the next 30-60 days post-ratification.

• Complete Removal: Targeted within 90 days from ratification, subject to market stability.

Voting

• In Favor: Agree with the decision to deprecate DAI on Arbitrum, supporting its removal from Radiant’s money market.

• Against: Oppose the deprecation of DAI on Arbitrum, favoring its continuation in Radiant’s money market.

• Abstain: Neutral or undecided, contributing to the quorum nonetheless.