Mint SUSHIO Stablecoin with SUSHI collateral

Summary

The creation of a SUSHIO stablecoin provides the community of SUSHI holders an incentive to go long on SUSHI by giving them the ability to mint a stablecoin (redeemable against other stablecoins) using SUSHI as collateral, thereby allowing holders to employ their capital without selling any SUSHI holdings.

This is made possible via the collaboration between OpenDAO and UMA, and is part of ‘flagship’ series of stablecoins. Incentivised liquidity pools will need to be set up with SUSHI support to ensure liquidity against other major stables such as USDC. OpenDAO will operate and oversee the process.

Abstract

OpenDAO adds SUSHI/USDC pair to UMA - Creates Mintable SUSHIO stablecoin. LP Incentives in the form of SUSHI - SUSHIO/USDC provided by SUSHI.

Motivation

Provide SUSHI holders another powerful option for hedging - wider integration of DeFi space as a whole. Encourages synergistic market activity between UMA, SUSHI, and OpenDAO.

Specification

SUSHIO stable coin minter + Incentives.

For

Potential massive increase in TVL of SUSHI tokens - likely price appreciation. Integration handled by OpenDAO. Increases rewards to SUSHI holders.

Against

More exclusive and isolated/controllable ecosystem. Near zero development time. Needs SUSHI as incentive in LP.

Poll

  • Create the SUSHIO stablecoin
  • Do not create the SUSHIO stablecoin

0 voters

6 Likes

The OpenDAO team is professional and would provide an excellent product for sushi.
I highly favor this, anyone reading check out exactly what they do.

We are working with them on creating DSDO at Dynamic Set Dollar and would recommend them.

4 Likes

Really in love with OpenDAO and anything they have made atm! Let’s make sushio is your next success

5 Likes

This is a tried-and-true method to borrow against different collateral types. There are currently yield dollar products against renBTC and wETH - You can see more about them here:

I personally would love to see this come about!

5 Likes

SUSHI OG here, and I have to say OPEN is a great project and community that I fully support any manner of integration with.

That said, this in particular would be really really awesome for sushi to have a stablecoin as proposed but perhaps the bigger benefit is the ecosystem play with UMA and REN so well integrated.

2 Likes

I think the stablecoin thing has already been addressed a few times.
It’s better for sushi stakers if we build our stablecoin on top of bentobox

2 Likes

I feel conflicted with this proposal. Introducing convexity to a leveraged sushi position might spell disaster in case of sharp price drops. It seems like it partially repeats Bentobox’s functionality, but without siloed collateral.

Is it possible to get a more detailed write up on the mechanics of the proposal?

2 Likes

I can only guess numbers when it comes to the amount of convexity it might introduce to the bonded price, but from my understanding these synthetic stable coins don’t actually let you mint 1:1 your collateral.

Instead, to account for market shifts in price like you describe, they over-collateralize the position, around a 60:40 ratio.

You could in theory choose to aggressively withdraw collateral if you’re extremely confident in the price action of your asset, but by default these are minted with a focus on stability, with a safe amount of collateral backing the synthetic.

p.s - When is Bentobox expected to release by?
The repo seems somewhat quiet as of late…

1 Like

Absolutely. We also think the proposal could use some more specifics, I’m hoping to have those added today. Thank you for taking the time to mention it.

1 Like

I am not too familiar with OPEN’s reputation here but it appears that there’s some legitimacy and weight to their participation.

Curious to find out more. I definitely feel this stablecoin proposal is more straightforward than ICHI’s suggestion. SUSHI as collateral? Simple… More details are welcomed so we can do some comparisons here.

2 Likes

Sorry for the delay on this, but I am also having issues trying to edit the original proposal…

I would like to have added that it would be beneficial to both communities to create an incentive pool for LPs. This would be open to discussion, but something comparable to what Sushi already does for similar programs makes sense - I’m hesitant to put a hard number on it.

It’s fairly straightforward in terms of process for set up and ease-of-use, flash-loan exploit resistant, and all that’s really needed is the blessing of the communities and some good old fashioned discussion.

I’d like to provide some more details and fill in any gaps, so I’m grateful for any comments. I’ll try to respond promptly.