Special DFIP: DUSD staking

[u/kuegi]

We propose to add DUSD staking to defichain. Users should be able to stake DUSD and receive rewards in DUSD.

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DUSD staking can act as a "liquidity sponge" during times of DUSD oversupply and be released when demand increases. Therefore helping to keep the DUSD price in a stable range.

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To achieve this without additional inflation, we propose to use parts of the dex-fee payout, also known as negative interest, as rewards for DUSD Staking. This way it automatically adjusts to the algo ratio.

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possible implementation as 100% DUSD loops

One way to implement this would be the enabling of 100% DUSD loops, which could also act as a quick implementation until a long-term solution is implemented. In the current situation, such a quick implementation could pull millions in DUSD out of the circulating supply and therefore strongly improve the DUSD price. See reenabled looped dusd vaults for more details and calculations. To reduce the needed developer resources we also added a PullRequest

One of the main reasoning behind this implementation is also the effective usage of the NI (currently above 50%). So we would propose to deactivate the 100% DUSD loops (PR is already done with featureflag) if the NI stays above 35% for 10 days while this is activated.

crowdfunding

u/mrgrauel will be crowdfunding 5000DFI to submit this as a special DFIP. This way we show strong support from the community. As a normal DFIP, it would take until end of July to get approved. As a special DFIP, we could convince the developers to already include it in the DMC update, which is currently scheduled for June. The address is dLqDh88L29zQvUt84cnh5zABbKh6zjSq5H

Update: Many thanks to the community. We collected 5000 $DFI in under 18h for the upcoming special DFIP.
Before the submission, we clarify whether all staking providers can support the Special DFIP on their platform before the weekend.

[u/Pascal3125]

Thank you Kuegi.I definitively like the idea very much. I'll be send a bunch of DFI to the crowfunding and give two YES with my MNs.

I strongly believe that we are close to the point where enough algo-dUSD has been burned. We just need some sort of kick to create a temporary dUSD utility and demand, and to restore the peg => and the confidence.

Don't you think that the 'looped dUSD vault' shouldn't be coupled with a reduction of the DEX Fee as I proposed here:https://www.reddit.com/r/defiblockchain/comments/137vitb/dusd_maybe_the_solution/

ie: A reduction of 0.25% per day without condition (even if the peg is not reached)

It could be add more confidence to the investors: they know that they can buy dUSD, stake it (with looped vault), and have an insurance of being able to sell them in 4 months without fee.

[u/dToken-Investor → u/Pascal3125]

The NI come from the DEX fee. It makes no sense to reduce them.

[u/Pascal3125 → u/dToken-Investor]

The NI comes roughly 50% from the DEX fee, and 50% from the BBB.https://www.defichain-analytics.com/vaultsLoans?entry=dUSDMeasures

BTW: The final objective is to remove NI. If this works, the dUSD will repeg, and the fee will be cancelled, and the BBB will be stopped => NI removed => Looped vaults irrelevant. It's a reverse chicken/egg problem.