PIP-37 l Deprecate wFRK as paUSD Collateral on Polygon PoS

Improvement Protocol (PIP) Approved PIPs
1

Summary:

The proposal aims to deprecate wFRK from allowed collaterals of paUSD on Polygon PoS following the deprecation of the token by the KUMA protocol.

Context:

wFRK has been available as a paUSD collateral since September 2023, following DAO approval of MIP-31 and MIP-31.1.

A few weeks ago, the KUMA DAO decided to deprecate FRK (and therefore wFRK) on Polygon PoS. In line with this decision, we propose to deprecate the wFRK from the allowed tokens as collateral of the paUSD on Polygon PoS.

Rationale:

We propose to perform the deprecation in 3 phases:

  • Reduction of the debt limit to 0
  • After a 4-week period, a gradual increase of 5,000 bps per day of the minimum collateral ratio and liquidation ratio will be performed until the entire debt has been repaid.
  • wFRK is removed from the tokens allowed as collateral for paUSD

Means:

  • Human Resources: Multisig signers will need to sign transactions to execute the proposal
  • Treasury Resources: There will be no treasury resources needed to execute the proposal.

Technical implementation:

  • On Polygon PoS:
    • In the paUSD ConfigProvider contract the DAO Multisig will call the ‘setCollateralDebtLimit’ function with these parameters:
      • ‘_collateralType’ : 0x01d1a890d40d890d59795afcce22f5adbb511a3a (wFRK)
      • ‘_debtLimit’ : 0
    • In the paUSD ConfigProvider contract the DAO Multisig will call the ‘setCollateralBorrowRate’ function with these parameters until the remaining debt is equal to 0:
      • ‘_collateralType’ : 0x01d1a890d40d890d59795afcce22f5adbb511a3a (wFRK)
      • ‘_borrowRate’ : Add 5,000 bps to the current borrow rate (managed by the DAO Multisig signers)
    • In the paUSD ConfigProvider contract the DAO Multisig will call the ‘removeCollateral’ function with these parameters:
      • ‘_collateralType’ : 0x01d1a890d40d890d59795afcce22f5adbb511a3a (wFRK)

Voting Options:

  • Accept the Deprecation
  • Against/Rework the proposal
  • Abstain

Authors: @Jeanbrasse from Mimo Labs

Sentiment poll:

  • Accept the Deprecation
  • Against/Rework the proposal
  • Abstain
0 voters
2

The proposal is now live on Snapshot from October 22th at 5pm CET until October 31st at 5pm CET: Snapshot

3

The vote has been approved by the DAO, result: Snapshot