Proposal to Allow Whitelisting of Uncollateralized Borrowing for Qualified Protocols to Increase Borrow Utilization and Lender APRs

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Proposal to Allow Whitelisting of Uncollateralized Borrowing for Qualified Protocols to Increase Borrow Utilization and Lender APRs
By: Slater Heil, creator and contributor at Blueberry Protocol DAO
8/23/22

Summary:
Blueberry protocol is a leveraged position protocol for Uniswap v3 LPs. In order to fulfill demand for leveraged LP position, the Blueberry Protocol requires stablecoin liquidity to be lent to position holders. Blueberry is launching in concert with a partner protocol who will fulfill $10 million of borrowing demand to create positions in the first 2 months, and the borrow demand will scale thereafter.

Abstract/Motivation:
This relationship would significantly increase utilization and interest rates for stablecoin lenders, driving more value to Euler.
Blueberry liquidates positions with a double backstop of a community stability fund and a partner liquidator fund that purchase liquidations and repay the potential lender (Euler) in full immediately. It is also an open liquidation market where other participants may do the same. These backstops eliminate the bad debt risk for Euler.

This is an activity that Iron Bank invented and has been effective in their partnerships with other protocols. Read more here: Introducing The Iron Bank. Part II: The Road to Cream v2 | by C.R.E.A.M. | Medium
In exchange for the liquidity depth, the Blueberry DAO is willing to offer a token incentive program that will further boost Euler yields for the tokens it needs to borrow.

Voting: Yes means to implement the proposal in full and whitelist Blueberry Protocol to borrow with a preset credit limit, starting at $10 million.

2

will vote no, the proposal is too random without any clear risk implication or anything.

3

This is meant to be a starting point for the conversation. What kind of additional analysis would you like to see?

4

you basically just saying “gib us money”

No risk analysis, no more explanation bout your protocol, no estimation bout yield and everything. You don’t even know whether it’s possible to do uncoll borrow lol.

5

Whilst I was interested to learn more Blueberry from this RFC, I am not in favour of creating an uncollateralised lending system around Euler, which is, at its core, an overcollateralised protocol.

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