CIP #24 - Yield Bearing Stable Coin Index V2 on Avalanche

Status: Proposed

Discussion Link: Yield bearing Stable Coin Index - V2 on Avalanche - #4 by Cryptoshi

Created: 04/07/2022

Executive Summary

Concisely put, a stablecoin is a cryptocurrency that has its price pegged, typically 1:1, to a fiat currency, or exchange-traded commodity. Primarily, stablecoins allow users to execute local and cross-border trade more efficiently, without having to go through the costly and slow banking system.

Typically, every blockchain protocol usually has at least stablecoin hosted on the network. The stablecoin is then primarily used to facilitate trading, lending, or borrowing of other digital assets built on top of the blockchain ecosystem. In the Avalanche ecosystem, USDC is the primary stablecoin utilized by most DeFi protocols on the Avalanche networks. However, there are a few other stablecoins such as MIM, USDT, UST, DAI etc. that users on the Avalanche can interact with through different bridges, ramps and wrapping protocols.

While a stablecoin may not grow in value over time, they definitely add immense value to any ecosystem. Notably the emergence of yield bearing protocols on the Avalanche network have created unique opportunities for holders of these stablecoins to earn passive income through high-yield staking, lending and farming on various liquidity pools.

It is on the premise of volatility prevention and yield aggregation that the Cook Team has created the Yield Bearing Stablecoin Index on Avalanche. It is composed of some of the world’s prominent stablecoins. It enables Cook users and index selectors to enjoy the benefits of compounded yield aggregation while shielding their crypto assets from the ravenous volatility that has become synonymous with the cryptocurrency market.

Problem Statement

Since the launch of the Yield bearing Stable Coin Index on Avalanche, a lot of changes have occurred in the Avalanche ecosystem. There is a native token currently included in the Index composition that is no longer supported by the Yield Yak protocol.

This makes it imperative for urgent V2 updates to be made to the YBSC-Avalanche.

Proposed Solutions

  • The Cook Team should de-list MIM from the Index composition as Yield Yak does not support it anymore.
  • The Cook Team should deploy the latest Yak strategy for USDT.e, USDC.e and DAI.e

Rationale

  • By delisting MIM and creating the YBSI-V2, we can ensure that all tokens in the composition are supported by Yield Yak.
  • The strategy update will ensure that the yield aggregation remains efficient and relevant.

Specifications

  • YB-SCIV2 on Avalanche should be created as an update to the existing YB-SCI
  • The YB-SCIV2 contains USDC.e, USDT.e and DAI.e and each stablecoin should be deposited on Yield Yak protocol for interest generation.
Component Allocation Yield Source
USDC 40% Yak Aave strategy
USDT 40% Yak Benqi strategy
DAI.e 20% YAK Aave strategy

We hereby propose that the Cook tech team should implement an update to the existing Yield Yield Bearing Stablecoin Index on Avalanche by creating the YBSI-V2 according to the specifications outlined in the table above.

2 Likes

I agree that MIM should be delisted and support implementation of latest Yak strategy for USDT.e, USDC.e and DAI.e

2 Likes

we need to follow latest updates and implement new proposals like this pretty fast

1 Like

changes will always be needed in the future, not only on this index. I agree to delist MIM. It’s not relevant anymore if tp use the old strategy if it’s not supported anymore.

1 Like

good proposal that has my support, to update Yield Yield Bearing Stablecoin Index on Avalanche

this update should be applied. seriously, there is no reason to use an unsupported strategy.

Benqi:
“Please note that Liquidity Mining emissions for bridged USDC ( $USDC.e) and bridged USDT ( $USDT.e) will be ending on April 14”
“Liquidity Mining emissions for native USDC and USDT starts April 14”

Oh This is a great catch! And yield yak just supported USDT and USDC on Benqi! Maybe to adjust proposal since USDT and USDC are not pegged token, might be even safer.