BIP 46: Utilize the treasury’s BADGER in Rari Capital’s DAO Fuse launch pool to provide BADGER liquidity

Status:
Pending
Objective:

While Fuse introduces a brand new DeFi primitive, there are endless opportunities for the use of this application that we may not even notice until the product is live and being used by the community. Liquidity is key to making Fuse successful and leading up to our launch we are looking for tokens to partner with. To start, I would like to propose BadgerDAO route treasury funds to the initial Rari Capital created pool that will hold BADGER. This is a pool that consists of community powered projects like KP3R, HEGIC, SUSHI, SFI, MPH, ALCX and more. Later on in our safeguarded launch, users will be able to generate their own pools and I see a future where BadgerDAO generates their own pool for treasury management (using bDIGG and BADGER), but in the meantime the Badger community seeds this launch pool with initial capital to become familiar with the platform.

Fuse can support any asset as long as there is a safe and secure oracle. Once bDIGG is listed on Sushiquotes, we can add bDIGG to one of our launch pools/allow users to add this as an asset in custom pools.

Benefits:

  • Treasury earns autonomous interest for lending BADGER holdings
  • We can build a custom yield aggregator once multiple Fuse pools with BADGER are earning yield
  • Users can now borrow against their BADGER positions
  • Collaborative partnership between both teams to build more integrations together

How does it work?

  • Treasury seeds capital into Rari Capital created pool
  • Treasury earns interest on lending
  • Users can borrow Badger

Since this is a new product, it is impossible to predict the rates. Most likely to be comparable to other interest rate protocols.

Considerations:

The pool should be seeded with $1M in BADGER to earn interest on lending, and allow Badger users to lever up on their current holdings.

Specifics:

Upon passing snapshot the core team can use the $1 Million worth of BADGER from the treasury to seed the Rari Capital created Fuse pool with BADGER.

Should BadgerDAO seed Fuse with liquidity?
  • For
  • Against

0 voters

3 Likes

I think it’s a great opportunity to leverage the DAO’s treasury and earn interest on our Badger and eventually DIGG.

Also, creating more trusted places for users to get utility from their Badger assets is important to the stability of the protocol.

It would be great to see other Badger vault tokens live on Fuse so users can earn interest on their BTC and borrow against it.

5 Likes

I can’t keep up with all the new products in the DeFi space. Provided that this Fuse is audited and as trustable as one can hope in the space, I don’t see why not.

2 Likes

"Fuse is a solution that would enable anybody to borrow against all of that, and quite literally anything else. " - medium link above

are we at all worried about providing $1mill of liquidity…the concept is interesting…the benefits have been listed…but what are the risks associated?

2 Likes

Seems like most of the partnerships we’ve done with new projects are for 250k, this one is asking for a million. Is there a different level of confidence from the team for the 250k projects vs the 1 million ones? Should we have different partnership levels based on the utility we believe that project offers our token holders? I guess I’m asking how are we currently deciding how much to give to new projects and do we have a formal framework we work from?

1 Like

I’d vote for this if there were some conditions on when we could withdraw our badger from the pool back into the treasury.

2 Likes

Fuse seems like a very interesting product. However, I don’t think I can vote for this proposal without a better understanding of the risks and mitigations.

And do we have an intuition around what yield we’d expect? For instance, right now the APY for lenders of BBADGER on CREAM is 0.02%. Seems like we’d be undertaking quite a bit of risk for very little reward? Maybe the Rari team can sprinkle some RGT rewards to incentivize a favorable vote? (i.e. see the recent ARCX proposal)

Disclaimer: I hold positions in RGT, BADGER & DIGG.

2 Likes

@JackLipstone could you please address the concerns raised by community members? I’d also like to understand what the timeline for seeding the pool would be (entry and exit).

Also, you mention this as a benefit, but from the UI, it appears there is no interest for providing badger to the pool.

Thanks for the BIP, and looking forward to the response!

1 Like