Protocol update proposal and Bonding for COFFIN
Hello COFFIN Heads!
We have some announcements and new protocol update proposals.
Collateral Reserve for CoUSD
After rebalancing, our CoUSD collateral reserve is now over 100%. However, we have seen increased COFFIN sell pressure when CoUSD is around its peg.
Bonding
We are now preparing a bonding mechanism as well.
This will have a similar mechanism to OlympusDAO (OHM) / Fantohm / HectorDAO.
What is bonding?
Bonding is one of the ways to get COFFIN at a discounted price. It allows COFFIN Finance to acquire its own liquidity ( COFFIN-FTM, CoUSD-USDC, CoUSD-DAI, COFFIN-DAI, etc.) and other reserve assets (DAI, yvDAI, FTM, MEMO, SPELL, WETH, WBTC, xBOO, etc.) by selling COFFIN at a discount in exchange for these assets.
Why Bonding for COFFIN?
Although CoUSD is partially collateral backed, currently COFFIN is not.
It’s a way for COFFIN to make an algorithmic reserve currency backed by other decentralized assets. We believe it’s a way to reduce selling pressure and increase confidence to buy.
Please read the page below for the details.
New Mint / Redeem Restriction to Prevent Inflation Loop
New Mint / Redeem will have some restrictions to prevent an inflation loop.
Some parameters can be suggested by xCOFFIN token holders.
It might not be enough, but it’s worth trying. Please read the page below for the details.
Timing of Redeem function back.
We believed re-enabling redeem is helping for CoUSD peg, but we haven’t done it. Because we are afraid that there will be selling pressure when CoUSD is around peg. We would like to hear opinions from the community about the timing by snapshot voting.
We think bonding mechanisms will increase demand for CoUSD. So We believe it’s better to release the bonding mechanism first before we re-enable redeeming. We would like to try bonding for a while, only by DAI & FTM before re-enabling redeem. We know no one has a perfect answer for the protocol. So We are going to create proposals for the timing and bonding on Snapshot.
xCOFFIN holders join the voting on https://snapshot.org/#/coffinfinance.eth/
We are going to create the proposal(s).
Yours Sincerely,
