Context:
One of the main roles of the Economic Committee is to proactively monitor external factors that could potentially affect the IST health while also doing diligent work to bring more resilience to this asset and position it as a premier stable token.
There are currently three factors happening concomitantly:
- The whitelisting of DAI as collateral for IST: DAI is the oldest & largest stablecoin in the space. Such an addition officially kickstarts IST move towards decentralized collateral, ahead of the launch of Vaults, later in Q1, 2023
- The arrival in Q1 2023 of native USDC in the Cosmos, which should considerably reduce bridge risk of USDC when implemented in Inter Protocol (subject to governance).
- The ongoing concerns regarding USDT: USDT currently represents 40% of the total collateral backing of IST (as of Dec 5, 2022 @ 9:50am PT) and although the EC members see no imminent short term risk associated with this asset, they still take into consideration public sentiment when planning
Proposed changes:
In light of the 3 factors mentioned above, the EC has decided the following:
- Reduce the current minting limit of USDT.axl from 750K to 150K.
- Add a 0.2% fee on minting with USDT which would reduce the occasional Tether arbitrage trade.
- Reduce minting limit for USDC.axl from 3M to 2M . This reduction finds its justification in the need to make room for DAI while maintaining the current total IST minting limit of 5M.
- Allocate 1.1M to DAI.axl and 500K to DAI.grv
Outcomes:
Once above changes are implemented, the minting limits by asset will be as follow:
- USDC: 3 M (60% of total) ; 2M USDC.axl & 1M USDC.grv
- DAI: 1.6 M (32%); 1.1M DAI.axl & 500K DAI.grv
- USDT: 400K (8%); 150K USDT.axl & 250K USDT.grv
The EC aims to move slowly but surely and feels comfortable with the proposed new allocation. It will revise its position if new elements arise in the meantime.
