Simple Summary

This SCCP proposes to update the LUSD wrapper parameter on Ethereum to the following:

• maxTokenAmount: sUSD 5m
• mintFeeRate: 50 bp
• burnFeeRate: 100 bp

Abstract

• The burnFeeRate is a parameter that determines the fee to be paid in order to release the underlying, when a synth is burned
• The mintFeeRate is the rate that paid for locking up a certain underlying to mint it's respective synth equivalent.
• The maxTokenAmount is the max amount allowed to be used to issue a synth with a underlying specified in the wrapper contract, in this case it's LUSD.

Motivation

The main motivation is the recent increase in usage of sUSD for perp trading, along with the set increase in interest rate on loans, as per SCCP-2081 which might increase the premium pressure on the peg. It is worth pointing out, that is preferable to scale synth for demand with wrappers over loans, because LUSD wrappers do not cause skew imbalances on their own.

Copyright

Copyright and related rights waived via CC0.