Please vote on SIP-34: Change IRM config for WETH (all silos) and XAI (DAI/USDT silos).
27 Jan 2023, 14:59
Please vote on SIP-34: Change IRM config for WETH (all silos) and XAI (DAI/USDT silos)
PS: The proposal title erroneously refers to USDC/USDT silos whereas the change correctly takes place in the DAI/USDT silos - we apologize for the mistake.
1- Change IRM config for XAI in DAI & USDT silos:
We’re experimenting with a Fixed Interest Rate Model (FIRM) in two silos: USDT and DAI. USDT and DAI depositors can borrow XAI at a fixed 2% APY regardless of how much XAI is utilized in those two silos. We currently use FIRM in XAI-ETH silo where users pay 0.1% APY for borrowing XAI with ETH collateral.
2- Change IRM parameters for WETH across all silos:
The new parameters for the ETH Interest Rate Model (IRM) increase the borrowing APY of ETH to match the market rate. This means ETH depositors will be earning the same APY as they would on other lending markets. With ETH APY set competitively, we will likely see more ETH flowing to our silos.
If you are currently borrowing ETH, expect your current APY to increase. For example, ETH borrowing rate in cbETH silo will go to ~5% at 69% ETH utilization.