SCCP-209: Update Synth Loans Backed by ETH

Simple Summary

This SCCP proposes to implement the following on sUSD and sETH loans backed by ETH:

• Lower the baseBorrowRate to 1 bp from 300 bp
• Lower the issueFeeRate to 0 from 25 bp
• Lower the utilizationMultiplier to the lowest possible number of 1 wei instead of 1 (1e18)

Abstract

Below is description of the parameters involved:

• The baseBorrowRate determines the annual interest rate applied on sUSD/sETH borrowing against ETH.
• The issueFeeRate is the fee paid on new loans taken and drawdowns.
• The utilizationMultiplier is used for increasing the interest paid on loans based on the skew, however, since wrappers were introduced this no longer functions as originally designed and currently increases the interest rate on loans beyound what is necessary.

Motivation

This SCCP aims at improving the sUSD/sETH liquidity on ethereum, given the acute shortage of LUSD on the ethereum network and the sETH/ETH wrappr being at max capacity with little headroom to raise it further due to the composition of the debt pool.

Copyright

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