• General
  • Ruler Protocol Lending Collaboration

Exec Summary: Add sOHM to the Ruler Protocol for lending

Ruler Protocol Summary:

Ruler Protocol is a lending platform where users can borrow their preferred cryptocurrency with any other cryptocurrency as collateral.

It aims to fill the gap by enabling the following:

  • No liquidations as long as borrowers pay back on time
  • Interest rates determined by supply and demand
  • Fixed rate loans at the moment of borrow / lend
  • Fungible loans, tradable anytime & anywhere

Please find more information in their Docs: https://docs.rulerprotocol.com

Motivation: Add more utility and optionality for lending protocols (similar to the Fuse petition)

Discussion Points:

  1. Should we pursue a relationship with Ruler Protocol? (e.g. do this)
  2. Should we incentivize the pool with $6k (denominated in OHM) per week for the program? Ruler will similarly provide 25 RULER/week per https://app.rulerprotocol.com/app/farms

    Don_G_Lover totally on board with a collab for ruler. I think we should let the rari fuse pool run for like 2 weeks and then after those 2 weeks evaluate how it did and if it looks smooth then add ruler. Just so we see how adding another partner can influence the protocol. Great work Don

    I'm for this partnership and think we should go forward.

    However, I'd also like to propose the treasury take an active position in the curve pools. This will effectively make the treasury lender of last resort and provide a backstop from liquidated OHM entering the market.

    The treasury can do so by lending excess DAI in the reserves to mint rcTokens. This generates yield for the treasury from interest rate on the loan. If borrowers default, this entitles the treasury to % of repaid DAI + liquidated collateral (OHM). The seized OHM can then be repurposed as rewards by the treasury rather than dumped on the open market.

      Im always aligned with .new partnerships, great idea. I would love to see this with unbanksy's idea above. Only thing we shouldn't rush to fast , keep in mind we still have to roll out rari, and work on Aave !

      unbanksy33 Really like this idea to mint rcTokens w/ excess reserves.

      Given that Aave discussion is planning a percentage - I believe we should allocate a much smaller portion relative to that engagement. What is the community thinking about this concept?

      balotelli45 yea, and it offers different lending profiles from Fuse or AAVE: fixed interest rate set by the market and no liquidation as long as borrower repays by end of month. Having more options for OHMies to choose from is a net benefit to the economy imo.

        unbanksy33 I agree however I remember there were a lot of people concerned with allowing OHM to be borrowed and thus exposed to shorting.

        Since we have much deeper liquidity than a few weeks ago I am not sure if these concerns are still valid though and we will one day or another have to integrate with all lending platforms.

        Let's see what the community thinks about this.

          balotelli45 On ruler you would be able to borrow stables using wsOHM as collateral. Thus there would not be much opportunity to short. You would get stables while having wsOHM as collateral

          Don_G_Lover This seems like a good integration - I don't see a need to incentivize at all, let alone with $6K a week in OHM (25 Ruler is less than $500) - we don't incentivize Rari and they are a much bigger player than Ruler. Ruler will earn fees off the loans and Ohmies will use it if it is useful for them - no need for incentives atm imo

          • Zeus replied to this.

            Mark11 I believe this is a typo in the proposal. They requested $6k/month ($1500 per week) in incentives to bootstrap liquidity in the pool.

            Adding some clarity around the $6k - it is per week; however, for the length of one loan term (4ish weeks). There is an option where we can launch without the RULER incentive (of 25 RULER/week). If we move this to snapshot, it will reflect three options:

            For: We incentivize the pool with $6k (denominated in OHM) per week for 4 weeks to receive additional RULER rewards (25 RULER per week)
            
            For: We launch the partnership with no incentives
            
            Against: We do not proceed

              Don_G_Lover incentives are meant for liquidity providers so without any incentives we’ll probably end up with an illiquid pool.

              14 ohm per week is not much for a 2nd lending option that’s meaningfully different from Fuse. For comparison, we award frax-ohm pool 45 ohm per day.

              I would propose 14 ohm/week for 1st month and then evaluate.

              • Zeus replied to this.

                unbanksy33 i agree that the cost is worth it to introduce a unique avenue for liquidity and exposure

                Just to clarify on this, the incentives are not going to the borrowers. They are going to liquidity providers and liquidity will facilitate borrowing. Launching with no incentive would likely result in an illiquid pool with no stables available to borrow at a reasonable rate.

                I don't see the rush at the moment.

                We just launched on Fuse pool and I personally think we should see how the market reacts to that.

                Agree to defer. What I also do not like is the asymmetry in incentives each party has to bring to the table. We pay way more and I do not see what particular benefit we get out of that asymmetry other than being strategically exploited as the weak counterpart. It is not so much about the value of money but how a partnership should be bootstrapped. If we roll together we should be aligned and equal to some extend.

                  xh3b4sd this is first and for most an additional value added by Ruler to OHM token as an ability to take non liquidatable loans against it. I would also imagine that a lot of the users from Olympus DAO would be lending given that in the worst case they will end up with even more OHM token that they are fine to hold while making OHM tokens and Ruler tokens at the same time by farming.

                  UPD:
                  The initial bootstrapping phase via incentives play a crucial role in allowing liquidity to form, in return allowing borrowing and lending to occur.

                  We also allow for any amount of rewards to be given. The threshold for us to incentive is 6k a week by the partner. But that does not mean 6k has to be given to be listed.

                  16 days later

                  Completely on board with ruler. With or without incentives, it makes much more sense to borrow alts against sOHM collateral on ruler than rari. You have to constantly monitor the market to avoid liquidation on rari, where as in ruler you pay the loan at the end of 2 Month period, your collateral is safe. Ruler is More like your credit card debt, pay on time for no penalty. Take loan against your sOHM, buy more OHM and put them for staking rewards. At the end if 2 month, sell your staking rewards to clear the debt. With ruler, the degen borrowing is more stress free than in other platform. I tested both the platforms, ruler works fine, easy to interact with the protocol and lending rates are reasonable.

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