Suggested collateral onboarding template for BLD community consideration

[chrisberg]

Hi BLD and Inter Protocol community,

Now that vaults have been released, we have noted a lot of interest in adding new collateral types to the vaults. The Economic Committee has prepared a suggested template for consideration for each new collateral type to support the BLD community’s discussion and (if the BLD community chooses to onboard that collateral the vaults) to inform the EC’s ongoing risk management functions.

Suggested collateral onboarding template

Introductory questions

1. Name and affiliation of applicant and association with collateral

2. High level overview of the project with a focus on the proposed collateral

3. How old is the project and when was the genesis block or token generation event?

4. Provide a brief history of the project

5. Describe the paths (such as the specific bridges and IBC denoms) that allow users to bring the token to the Agoric chain.

Token cryptoeconomics

6. Describe the uses of the token (does it have governance rights, cash-flow rights, is it staked to provide security, etc)

7. Links to the whitepaper and documentation portals for the core system(s) that interact with the proposed collateral.

8. Have there been any significant cryptoeconomic changes to the proposed collateral token since launch or since the creation of the whitepaper?

9. List any possible oracle data sources for the proposed collateral type.

Financial characteristics:

10. Is the supply of the token fixed or does it have an issuance rate?

• If fixed, provide the total supply
• If there is an issuance rate, please provide the current supply and projects of issuance out for 5 years.

11. What % of the supply is current available in public markets (as opposed to locked up in vesting or reward, or controlled by a shared treasury)

12. How concentrated is ownership over the token? To the best of your knowledge, how many unique users hold more than 2% of total supply (regardless of locking, staking or vesting arrangements). How many addresses hold more than hold more than 2% of total supply?

13. How many different markets is it traded on?

• What are these markets?
• How liquid is token supply on those markets?
• How do users access these markets (user account, wallet connect, other)?
• Are these markets accessible over an IBC transfer from the Agoric chain?

14. Provide pricing history of the asset

• A chart of prices going back to token generation
• A chart of market capitalisation (fully diluted) going back to token generation
• A chart of market capitalisation (floating supply) going back to token generation

Legal characteristics:

15. Does the project or the DAO have a legal identity in a specific legal jurisdiction? If so please provide details.

16. Please provide any legal documentation that the project may have commissioned.

Portfolio characteristics:

17. Set out the business case for Inter Protocol accepting the asset:

18. Are there any new expected use cases of the IST that would be generated by onboarding the collateral asset?

19. What is the expected demand for the vaults using the proposed collateral?

20. How correlated is the asset with other assets already accepted as collateral?

21. What economic/business risks would Agoric be exposed to if this asset were accepted as collateral?

22. Proposed parameters for collateral type

• Debt limits
• Minimum collateralization ratio
• Liquidation ratio
• Stability fee / interest rate for borrowing

23. Provide any audits that have been conducted of the proposed collateral

24. Provide any details of any ongoing security programs, bug bounties or similar programs

25. Does the collateral have a whitelist or blacklist function? If so, detail the process by which this function is exercised.

26. Can the collateral or any contracts associated with the collateral be upgraded? If so detail the process by which the upgrade can occur.

[0xpatrick]

This is a great template, and very thorough. In a different thread, I asked about a Risk Framework, and this is exactly what I was hoping to see!

In addition to the above, can the Econ Committee also offer guidance on minimum thresholds for some of these criteria? Thinking along the lines of -

• 3. The project needs to be at least [6 months old], but ideally [1 - 3 years old]
• 9. The collateral type must have at least [3] data sources for oracles, or 1 data source with at least [$xm] in liquidity.
• 11. At least [x%] of the supply should be available in public markets
• 12. There should be at least [x thousand] unique holders, with no more than [ x ] holding more than [2, x]% of supply.
• 13. The collateral type must trade on at least [ x ] exchanges, and the exchange must have at least [$x] liquidity or [$x] quote depth at 2% slippage to be considered.

These could also be captured with a scorecard/rubric of sorts that uses a sliding scale. Euler used a 0 to 1 scale documented here that could be a helpful exercise.

I recognize scorecards are not always cut and dry, as it can be hard to quantify some qualitative aspects. But I think additional guidance along these lines will be helpful to have when community members are evaluating collateral types to recommend!

[fred]

There is now a template to start discussions on collateral onboarding:

Vaults Collateral Discussion

Click on About to find out more or + New Topic to start a discussion.

[internet_value]

Ok, i want to suggest the XRP.
Bridge it and add

Thanks.

[JDLorax]

Hi there, welcome to the Agoric community forum and thanks for commenting!

This thread in particular is more dedicated to the discussion around the suggested template itself as opposed to discussion of adding new assets as collateral. If you have feedback or suggestions for additions to be included in the template then you’re more than welcome to share those here! As for discussions about new collateral types, a dedicated thread is the best way to kick off that conversation.

A couple of things to note about adding XRP as collateral:

1. The above suggested template is available for anyone to fill out in order to request a new collateral type for Vaults. If you’d like to see XRP added then the first step in that process is to start a discussion thread by filling out the template, which can be done by creating a topic in the Vaults Collateral Discussion category. Within that template the bridging point could be highlighted.
2. Bridging: There is currently no bridge connecting XRP to Agoric or the broader Cosmos/IBC ecosystem. In order to add XRP there would need to be a bridge available to bring XRP to the Agoric chain; this could theoretically be either a bridge directly to Agoric or a connection via IBC. The bridge would require it’s own risk assessment, a detail that is included in the template (see point #5).