This FIP follows up a post put up earlier this month on the topic of Utilising the Basket - Flash Loans + Basket Diversification
Adding ETH pegged yield earning assets to the Basket of the Protocol is an easy way for the Protocol to be more capital efficient and generate revenue with the ETH it has sitting around. A simple way of doing this is replacing some of the ETH in the basket with sETH or stETH which yield a calm 5+% when at rest. One could take this further and utilise Basket Bags as containers for other yield bearing assets to be added to the Protocol’s Basket and thus increasing its effective Basket Factor. The quicker the Basket gets to its target factor of 100% the quicker BANK burns commence. For context, the Protocol is very efficient at accruing ETH via the Dutch Auctions. Since the Launch of FLOAT the Protocol has accrued hundreds of ETH while ETH has been dropping - a FLOAT buy with ETH during genesis was certainly a great move.
This initial step of Basket diversification is a simple way to have an additional method of increasing the Basket Factor of the Protocol while laying the pathway via the Basket Bags to add other assets to the Basket in the future.
Some of the initial ETH-yielding assets were discussed on discord to add to the basket include:
Saddle alETH-ETH LP
Curve stETH-ETH LP
Convex + CRV + stETH-ETH LP
Curve V2 TriCrypto (Not pegged)
Please post below (shill) if we missed your favourite ETH pegged yield earning asset, or want to support a particular protocol. Please also share with the respective communities so we can see who’s most interested.
Currently the core team is leaning towards:
- LIDO stETH
- Curve V2 TriCrypto (interesting opportunity, but more risk & usdt component)
However the DAO holds the power - you get to decide
Based on the positive support for this proposal, we will proceed to organising a Scattershot vote on which assets to add to the Basket.