Protocol Update Proposals

Proposal Overview

The problems

  • While allowing a complete lack of regulation over both the minting and redeeming processes, bad actors can take advantage of our system.
  • The protocol cannot control Inflation & deflation as of now.
  • So much to a degree, that CoUSD is approaching failure.
  • It may be due to the lack of the redeem function temporarily, therefore the utility it had on our protocol’s site.
  • We currently use a collateralized system of mainly Fantom, with a minor amount of COFFIN to supplement it and strengthen itself.
  • It has become apparent that this coin alone is too volatile for our needs.
  • Now without the redemption feature, CoUSD is backed entirely by Fantom taking away our ability to adjust accordingly with a deflationary mechanism
  • At this rate, the price of CoUSD is going to align with a very volatile ratio, lacking in appropriate collateral.
  • We need to prevent inflation, and we believe that the protocol alone should control both the minting and redemption of CoUSD.
  • Unfortunately, abusers of arbitrage have brought the health of the protocol to a critical level, and we need to stop those actions.
  • At the same time, CoUSD and the protocol operating behind it need to ensure a product of value to our community

How We Are Going To Solve The Problem:

  • We need to improve our collateral mechanism.
  • Using transfer tax for xCoffin incentive. And using marketing funds as well, it’s up to 2 months or until CoUSD peg recover.
  • We may reduce farm rewards temporary instead.
  • Our new collateral reserve will be consistently rebalancing itself with a diversified portfolio of stable assets to keep the protocol at a level of zero risk possible.
  • Users will be able to mint CoUSD at a discount and will be able to collect it later. Or users will be able to mint immediately without discount.
  • To maintain a healthy supply of CoUSD, users may only mint/redeem when we have an acceptable ratio of collateral and the price is within acceptable range. (Similar To the logic of FRAX Finance.)
  • Though of course COFFIN must have utility and value in itself.
  • So we still refer to it as one of our collateral stablecoins.
  • There will be a limitation on the amount a user may mint/redeem, based upon both the current collateral to debt ratio, and the frequency with which the mint/redeem per day.
  • The protocol will have limitations for total daily redemption for each address.
  • The protocol will have limitations for total hourly redemption.
  • Users can redeem CoUSD to FTM + COFFIN , but receive it a few days later.
  • New Bonding Mechanism for CoUSD demand.

A new partially collateralized token mechanism in action

Using transfer tax and change threshold of burn/tax.

  • We should use the transfer tax partially for xCOFFIN users, bassicaly.
  • Temporary, up to 1 month, we should change the threshold to $0.00, to incentivize xCOFFIN holders. After 1 month, change it to $0.9. After 2 months of now $0.98 back. After 3 months, 50% of the tax should be used for xCOFFIN.

Marketing funds for xCoffin incentive

Reducing farm rewards temporary

New Collateral Reserve / Rebalancing

A New Mint Mechanism

A New Redemption Mechanism

  • 1 CoUSD => (2) days later => $1 worth of FTM.
  • 1 CoUSD => (2) days later => $1 worth of FTM+COFFIN
  • Limitation by current price
  • daily limitation
  • Enough collection delay. It’ll be more than 2 days.

To prepare a new collateral & redemption system, continue to disable redeem another 4 weeks after voting resolution.

New Bonding Mechanism for CoUSD demand.

  • Users bond $1.00 worth of CoUSD => (5 days later) => users will receive $1.10 worth of COFFIN. ( APR 730%
  • Users bond $1.00 worth of CoUSD-USDC => (5 days later) => users will receive $1.10 worth of COFFIN. ( APR 730%
  • Users bond $1.00 worth of CoUSD-USDC => (5 days later) => users will receive $1.10 worth of COFFIN. ( APR 730%

How to keep the CoUSD price stable. Buyback options with collateral if enough collateral. Sell options if above peg.

New Road map & Expected Schedules

  • Stable token itself.
  • Bonding mechanism to prepare bear season.
  • Rebalancing.
  • Security.
  • New Minting/Redemption mechanisms.
  • Others as suggested by the community.
  • Rebalancing ( estimate: first 2 weeks after voting )
  • New minting/redeem system ( estimate: next 2 weeks )
  • Bonding system ( estimate: next 2– weeks )
  • Audit & Partnership ( after finishing above )

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Coffin Finance

Coffin Finance

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