Summary:
This proposal updates the market rates for USDC and USDT on Fluid. Aligning it with current market conditions.
Proposal:
The Instadapp team is proposing the following adjustments to better align the rates with market conditions and optimize utilization within the Fluid protocol.
Current Rates:
- Utilization 0%: Rate 0%
- Utilization 80%: Rate 5%
- Utilization 93%: Rate 7%
- Utilization 100%: Rate 20%
Proposed Rate Curve Adjustment:
- Utilization 0%: Rate 0%
- Utilization 80%: Rate 12%
- Utilization 93%: Rate 18%
- Utilization 100%: Rate 33.34%
Reason:
The current market rates for USDC and USDT are currently overutilized and not reflective of the broader market rates. The new rate curve is inspired with new MakerDAO’s rates here. The stablecoin markets on Fluid can be made more competitive by updating the rates according to the proposed curve.
Since the launch of Fluid, users have been quite comfortable borrowing at +10% rates as seen from the WIP dune image below. The new rate curve will help adjust to that demand of borrowers & lenders.
Conclusion:
This proposal updates the USDC and USDT rate curves on Fluid to better match current market conditions.
