Acquire CASH Token to Farm Stablecoins on Polygon
Scope:
Request DAO approval to convert idle stablecoin reserves to Stabl.Fi’s CASH token on Polygon.
Objective:
Convert up to $2mm of stablecoins into CASH, a yield-bearing stable indexcoin on the Polygon blockchain which has its own underlying stablecoin farming strategies. This takes the burden off of the TOs and DAO to deploy funds manually.
Rationale:
The Wonderland Treasury still has a lot of unallocated funds, and effectively deploying the entire treasury is a massive undertaking. WL could benefit greatly from tokens that handle the manual investing of funds, allowing WL to simply hold the yield bearing token and benefit from the profits without requiring the DAO to search for and vote on new investing strategies. Additionally, this would expose WL to stablecoin farming strategies on Polygon, further diversifying treasury investments. In the absence of a Risk Officer, the DAO is being asked to accept the risk by providing its approval.
Stabl.Fi Background:
Stabl.Fi is a new DeFi protocol operating on the Polygon blockchain, focusing on launching 2 products - the CASH token and Satin DEX. The two products will have synergies that support and catalyze the other.
CASH is currently live and in the final stages of beta testing. Satin DEX should launch sometime in January 2023.
Transitioning Multisig wallet to include
Core 4 team members +
Weso - Beefy
Marin - LIDO
Yohaan - Polygon Defi
Kila - QiDao
CASH Tokenomics:
Stabl.Fi’s flagship token, CASH, is a yield-bearing stable indexcoin - the first of its kind.
Stablecoin - The protocol accepts collateral in traditional stablecoins (USDC/USDT/DAI), and returns an equal amount of CASH tokens (minus 0.25% mint fee) to the user, which is pegged to the average of the 3 collateral tokens (essentially $1).
Yield-Bearing - The collateral is then sent to various Polygon farming strategies. The yield from these strategies is returned to CASH holders in the form of more CASH tokens.
Indexcoin - The 0.25% mint/withdrawal fee as well as 5% of daily farming yields will not be returned to CASH holders, but simply added to the farming treasury. Additionally, 10% of all Satin DEX trading fees will be sold to stablecoins and added to CASH treasury. This creates a positive discrepancy between treasury size and CASH in circulation. The ratio of treasury to CASH is called the “Capital Efficiency Index.”
For instance, if the CEI is 1.1, that means that for every CASH token, there are 1.1 stablecoins behind it. Each CASH token is farming with 10% greater CE than would be possible using the same strategy with traditional stablecoins, giving greater yields by holding CASH. Additionally, each CASH token would be overcollateralized by 10%, providing a form of organic insurance in the unlikely event of a hack or other loss-of-funds situation.
The tokenomics of CASH favor a “buy and hold” approach, as the CEI will only increase perpetually. This will give greater relative yields and greater safety through overcollateralization over time. This fits nicely with Wonderland’s current needs, as the CASH could simply sit in the treasury and earn perpetually growing yields, instead of sitting idle.
Risks/Concerns
Impermanent Loss
If pooled stables depeg it can cause an imbalance, leading to IL. Tokens that we will be exposed to in this pool are: DAI, USDC, and USDT. These stables are the cornerstone stablecoins in the DeFi space, and have a low risk of depeg.
Smart Contract Risk
Smart contract, execution and exploit risk are present as usual. Due to CASH’s overcollateralization, an additional layer of security is automatically in place should such an event occur.
Stabl.fi is a fork of OUSD
OUSD audit information:
CASH has been fully audited:
