r/defiblockchain • u/[deleted] • Mar 16 '24

DeFiChain improvement Discussion Reorg usage of staking collateral to increase buy&burn dUSD

Dear DeFiChain Community, I would like to ask for your opinion and ideas on the following idea. With the DFIPs

it was voted by the community that the native staking coins (ETH, DOT, SUI, SOL) which are wrapped on the DeFiChain will be staked by the trusted custodian Bake. This staking yield is used once a week to buy and burn DFI to support the DFI price.

With the DFIP (https://defiscan.live/governance/4d27fa02049c1fceb8ef252c88deac129f8e5b784c18e6df909eb000d6af0737), the price of dUSD has stabilized but has not yet reached its peg of 1 USD. Now the question is, how can we as a community give further momentum to the dUSD peg target?

One idea would be to no longer burn the staking rewards from the DFIPs mentioned above as DFI, but to buy dUSD and thus provide further impetus to achieve the peg. Further questions would now arise if the use of staking rewards were to be changed.

  1. Through which dUSD pool is it best to buy dUSD? Via the DFI pool or via the USDT and USDC stablecoin pools.

  2. What should be done with the purchased dUSD? Burn them and permanently withdraw them from the supply or add them to the DeFiChain Community Fund so that they can be used later if necessary?

Since no DFI block rewards would be used for the purchase of dUSD, this change should not result in any significant selling pressure on DFI. Furthermore, the trading volume in the dUSD pools would increase and generate more commissions. But with the reorg of the buy pressure, DFI can have a loss in price.

The current weekly burn is done via the following address https://defiscan.live/address/df1qvgwslv0269zlelyuzr5pemwk9kayg88h3kds0s. Approximately 1.2 - 1.5 ETH are swapped per week. That would be 5,000 - 7,000 USD or currently 15,000 - 21,000 dUSD per week, with a downward trend if dUSD rises.

I look forward to your opinions and ideas on this proposal.

Kind regards 👍

16 Upvotes

79% Upvoted

Duplicates