As we strive to continue our expansion and fortify our position within the DeFi space, it is necessary to explore new avenues of growth, flexibility, and security for Raft. Given the substantial growth and positive reception of Raft in its initial days, it has become evident that our community is ready to support this journey. With this in mind, we propose a significant advancement for our protocol: the expansion of the collateral asset pool used for generating R.
To build a more diverse and resilient asset base for minting R, we propose the introduction of four new assets into our collateral pool: WETH, WBTC, sDAI, and rETH. These assets have been carefully selected to provide a balanced mix of decentralization, capital efficiency, and price stability, while also reflecting our commitment to engaging with the broader DeFi ecosystem.
1. WETH and WBTC: These represent two of the most decentralized and censorship-resistant assets, aligning perfectly with our core values. Their integration will not only deepen our engagement with the Ethereum and Bitcoin ecosystems but also fortify the stability of R.
2. sDAI: As a yield-bearing version of DAI that capitalizes on the returns generated by MakerDAO through its RWA investments, sDAI can enhance the capital efficiency of our stablecoin, all while adding another layer of yield-earning potential for Raft users though the DAI Savings Rate (DSR).
3. rETH: RocketPool’s liquid staking token, rETH, carries properties similar to stETH and can further diversify our asset base while accommodating users who prefer to hold and stake their Ethereum via RocketPool.
Broadening the scope of collateral assets carries several advantages:
Liquidity and Resilience: A diverse asset base can make R more resistant to market fluctuations and provide additional liquidity.
User Base Expansion: It increases the appeal of R to users who hold these assets, expanding our user base.
Risk Reduction: It reduces the concentration risk associated with single-asset-backed stablecoins.
Future Potential: The integration of these assets into our system represents a step towards our broader vision for R as more than a simple LSD-backed stablecoin.
Every collateral onboarded on Raft will have a specific set of parameters that governs its functioning. In particular, the minimum collateralization requirement, the borrowing and redemption fees, and the liquidation rewards, will be decided based on the specific characteristics of the collateral and its interaction with the existing collateral base. The rationale is to ensure that future collateral assets provide a synergistic effect to the Raft protocol without exposing users to market manipulation or arbitrage opportunities.
As this proposal marks a significant shift in our strategy, we would highly appreciate the community’s insights and feedback on the matter. We want to ensure we strike the right balance between growth, stability, and risk management while maintaining our commitment to decentralization and community governance.
We encourage you to share your opinions on these assets, any potential risks you foresee, and other assets you believe should be considered. Our objective is to make decisions that are best suited for the long-term success of Raft and the satisfaction of our community.
Thank you for your continued support. We eagerly anticipate your feedback and involvement in shaping the future of Raft.