Summary
Remove wUSDM of Mountain Protocol from the KNOX collateral basket.
Current Basket:
33% Compound USDC
33% Aave USDC
33% wUSDM of Mountain Protocol.
New Basket:
50% Compound USDC
50% Aave USDC
Abstract
The proposed proposal, if enacted, would remove wUSDM from the collateral basket.
Problem Statement
USDM will become deprecated as a result of Anchorage Digital acquiring Mountain Protocol.
Rationale
The USDM rewards will remain active for 30 days starting on May 12th. After which, they will drop to 0 permanently. Minting of new USDM has been halted. Remaining USDM can be redeemed 1:1 for USDG. Onchain liquidity will be negatively impacted by this acquisition, and USDM will become less liquid overtime.
Risks
The risk is leaving wUSDM in the basket. Over time it is expected that onchain liquidity will dry up, and if governors fail to act quickly, this could result in a very low liquid asset in the collateral basket. The consequences of leaving an asset with low liquidity in the collateral basket can be slashing risks to RSR stakers(and if extreme enough potentially slashing to RToken Holders). Additionally, KNOX will be unable to scale with a deprecated asset in the collateral basket.
- Yes, I am for this proposal
- No, I am against this proposal
