| SIP | Title | Author | Status | Track | Created |
|---|---|---|---|---|---|
0082 |
Reduce Zero Origination Fee Floor to 5% |
capitalist42 |
Ready for vote |
Parameter |
2024-07-15 |
If approved, this proposal will reduce the ZUSD origination fee floor in the Sovryn Zero protocol from 8% to 5%.
The Zero Protocol is still in the bootstrap period. We should focus on growing the ZUSD/DLLR supply. The 2% to 5% redemption percentage per month is generally acceptable. For the past 30 days, there were about 7.2 BTC redemptions (~1.3%), even with fairly volatile BTC price movement. The level of redemption is generally low. Given incoming liquidity easing, the condition is perfect for reducing the origination fee. With a lower origination fee, we will likely see an increase in ZUSD supply and protocol revenue.
If approved, the origination fee will fluctuate between 5% and 100%. The following change will be made to the Zero Protocol base parameters:
It will update "BORROWING_FEE_FLOOR" from 8% to 5% by calling setBorrowingFeeFloor(uint256) on the 0xf8B04A36c36d5DbD1a9Fe7B74897c609d6A17aa2 contract with the encoded data 0x00000000000000000000000000000000000000000000000000b1a2bc2ec50000.
Copyright and related rights waived via CC0.