SIP-377: Add aUSDc (stataUSDc) as a new collateral type to Synthetix V3 on Base

Simple Summary

This proposal outlines a plan to add stataUSDC (static aUSDC) to the Spartan Council Pool on Synthetix V3 on Base, enabling users to earn lending fees from Aave and trading rewards from Synthetix Perps.

Abstract

Supporting stataUSDC as Base LP collateral will provide Synthetix LPs with yield-generating collateral. This move aims to enhance the liquidity and scaling capabilities of the V3 & Perps on Base. Using stataTokens rectifies concerns related to the growing balance (rebasing) nature of aTokens, making integration with Synthetix more seamless.

Motivation

Given the significantly high return in lending markets and the low risk they enjoy due to over-collateralization, adding stataUSDC to Synthetix Base LP will offer Synthetix a competitive edge.

Users will benefit from dual-yield streams through DeFi lending and perps trading rewards. These LPs will also be less sensitive to fee-share experimentation.

The stataToken vault/wrapper addresses the implementation overhead and unnecessary headaches associated with the growing balance on aTokens, making it easier for Synthetix to integrate with Aave's aUSDC.

Specification

Adding stataUSDC to Synthetix V3 involves deploying a vault accepting static atokens to automatically manage the rebasing tokens and integrate them into the Base LP. This will enable users to deposit these assets, earn lending yields, and participate in perps trading while accounting for yield rebasing from lending markets.

Synthetix will use the V3 vault manager to fetch the current ratio of statatokens / USDC, and then denominate the vault of statatokens in USDC. This will be used as the oracle price of USDC, as the rest of the Andromeda deployment is denominated in USDC.

To maintain sufficient USDC liquidity for traders, the protocol will limit non-USDC collateral types to a maximum of 50% of the total LP collateral.

Potential Risks - Aave insolvency (limited due to the over-collateralization and low-risk nature of USDC) - Despite these risks, the attractiveness of using stataUSDC as collateral on Synthetix outweighs the potential drawbacks.

Rationale

N/A

Technical Specification

On the Synthetix side, implementation will be contingent on:

• Add stataUSDC as a collateral type accepted by the core system, which will be valued at USDC multiplied by the USDC per stataUSDC ratio.

The main technical features of stataTokens are:

• Full EIP 4626 compatibility
• Accounting for any potential liquidity mining rewards
• Meta-transactions support for gasless transactions
• Upgradability by Aave governance
• Powered by a stataToken Factory for permissionless deployment and token registry

Test Cases

• Deployment and testing of the vault contract using the Aave USDC Base stata tokens
• Integration testing with the Base LP to confirm operation and compatibility with existing Synthetix infrastructure

Configurable Values

Maximum LP amount: $5 million Issuance Disabled Liquidation Ratio: 110%

Copyright

Copyright and related rights waived via CC0.