[ARFC] - Add DPI to V3 Ethereum and Freeze on V2 Ethereum

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ChaosLabs proposes to add DPI to the Ethereum V3 Liquidity Pool and freeze it on V2 to address its decreased market cap and trading volumes, and mitigate centralization risk. They also suggest listing DPI in Isolation Mode on Aave V3 with an initial Liquidation Threshold of 70%, a debt ceiling of $2.5M, a Supply Cap of 25% (75K), and a borrow cap of 40K DPI, disabling cross-collateralization.

In an effort to address the significant decrease in DPI's market cap and trading volumes throughout 2022, ChaosLabs has proposed a series of changes. The primary proposal is to add DPI to the Ethereum V3 Liquidity Pool while simultaneously freezing DPI on the Ethereum V2 Liquidity Pool. This move is also aimed at mitigating the centralization risk associated with DPI compared to the direct holding of the basket of underlying assets.

ChaosLabs further recommends listing DPI in Isolation Mode on Aave V3 on Ethereum, given its low market cap and trading volumes. An initial Liquidation Threshold (LT) of 70% is suggested, taking into account DPI's price volatility over the past year. The proposal also includes an initial debt ceiling of $2.5M, following Chaos Labs’ Isolation Mode Methodology, which is due to be published soon. The probability of an extreme price drop for DPI is estimated as Medium-High.

The proposed changes also include setting the Supply Cap at 25% of the circulating supply to 75K and a borrow cap of 40K DPI. It's important to note that moving assets from AAVE V2 to AAVE V3 Isolation Mode will disable cross-collateralization. However, ChaosLabs believes that DPI should be listed in isolation mode. To facilitate these changes, ChaosLabs has published AIP-189 to freeze DPI on V2 Ethereum, with the process set to begin in 24 hours. Community members are encouraged to participate in the vote. The outcome of these proposals and the community's response will significantly shape the future of DPI on the Ethereum platform.

Posted 9 months ago

Last reply 8 months ago

Summary updated 2 months ago

Last updated 08/12 04:39