I propose removing the Tether collateral from eUSD and adding pyUSD that has scored A- via Bluechip’s rating framework, and USDM that has scored B+.
Swap out eUSD’s Tether collateral for a pyUSD derived receipt token from Aave. Consider swapping out the remaining 25% of eUSD collateral with USDM.
USDT derivatives comprise half of the eUSD basket. That is, 25% of eUSD is cUSDT and 25% saUSDT. USDT scores a D from Bluechip and a 4 from S&P Global.
The other half of eUSD is USDC derivatives, 25% cUSDC and 25% saUSDC. USDC scores a B+ from Bluechip, and a 2 from S&P Global. In spite of its previous depegging event in March of 2023, it’s more attractive to hold than USDT.
You could potentially view these two ratings, in combination, to understand the Bluechip rating for eUSD as a C. The same for S&P Global potentially rating eUSD a 3.
Tether’s presence drastically lessens the attractiveness of eUSD, from an RToken holder and staker’s perspective. We want eUSD to be attractive such that the TVL of eUSD increases.
In order to make eUSD more attractive to DAOs and treasury managers, we must remove USDT and replace it with safer assets.
Below is a link to Bluechip’s website, which compares USDT, pyUSD and USDM.
pyUSD is an excellent candidate for replacing 25% of eUSD’s collateral (half of USDT).
pyUSD scores an A- from Bluechip. It can be inferred that S&P Global would rate pyUSD a 2, based on their assessment of USDP.
USDM scores a B+ from Bluechip, and is a good candidate for replacing 25% of eUSD’s collateral (the other half of USDT).
USDM’s inclusion would diversify eUSD to three assets from two. This is likely to make eUSD more appealing as a treasury asset.
USDT being scored poorly via two different ratings agencies speaks volumes about its integrity. Does including USDT speak volumes about eUSD’s integrity?
The world is looking more closely at stablecoins and it is imperative that eUSD be the flagship for not only RTokens, but for consciously governed stablecoins. If eUSD is meant to be a flagship, it is ridiculous to include Tether in its basket.
pyUSD is a relatively new asset.
USDM holds the same B+ scores as USDC, but it could be argued that USDM has less of a track record compared to USDC and pyUSD (PayPal + Paxos).
Removing USDT may lower yield to stakers. While valid, I don’t think this will discourage stakers, as evidenced by the eusdRSR yield rate going down steadily due to additional, continued RSR staking.
Thank you for the consideration. I look forward to hearing your comments below!
Bluechip comparison link: