Summary: Let's take action on opening an OHM Fuse pool.
Background: Fuse is a lending platform by Rari Capital where anyone can create a custom lending/borrowing market. A Fuse pool would allow OHM holders to deposit sOHM as collateral, and borrow stablecoins or other assets against it. This provides liquidity to holders without requiring them to sell their tokens in the market. Right now, Fuse is in the tail end of their guarded launch, during which a new pool must be applied for and approved by Rari governance.
Parameters: I propose creating an upgradeable pool, governed by the policy multisig, which would initially feature USDC, DAI, FRAX, and ETH as counterassets. sOHM would initially be available only as collateral, not for borrowing. The pool would have the following parameters:
Upgradeable: Yes
Close Factor: 50%
Liquidation Incentive: 12%
sOHM Collateral Factor/Reserve Factor: 33% / 0%
USDC CF/RF: 65% / 10%
DAI CF/RF: 65% / 10%
FRAX CF/RF: 65% / 10%
ETH CF/RF: 65% / 10%
Note: We can petition Rari Governance prior to setting these parameters in stone. These numbers are based on conversations with several Rari contributors well-versed in constructing these pools.
Motivation: To create new avenues for liquidity, and to boost the utility of OHM as an asset and currency.
Risks: Liquidations can increase volatility in our market, which is why the sOHM collateral factor and liquidation incentive have been set conservatively. These parameters can be loosened as time goes on.
For: Petition Rari Governance to create a Fuse pool.
Against: Do not petition Rari Governance.
(This post was edited to include FRAX as a borrowable asset).