Executed

HIP 12 - Vintage Vehicle Collateral Ruleset

@alexhifi.eth

ID 11

Proposed on: Nov 15th, 2024

Actions

Type

Address

Details

Custom

0xaFf0...7EFe

setFeed(..)

Custom

Account

0xaFf0...7EFe

Method

setFeed(..)

Custom

0xEe46...A8c3

listCollateral(..)

Custom

Account

0xEe46...A8c3

Method

listCollateral(..)

Custom

0xEe46...A8c3

setCollateralCeiling(..)

Custom

Account

0xEe46...A8c3

Method

setCollateralCeiling(..)

Custom

0xEe46...A8c3

setCollateralRatio(..)

Custom

Account

0xEe46...A8c3

Method

setCollateralRatio(..)

Custom

0xEe46...A8c3

setDepositCollateralAllowed(..)

Custom

Account

0xEe46...A8c3

Method

setDepositCollateralAllowed(..)

HIP 12 - Vintage Vehicle Collateral Ruleset

Summary

This improvement proposal aims to establish a ruleset for onboarding vintage vehicles as collateral in the Hifi Protocol. This proposal updates and expands upon the framework established in HIP 3, moving from single-vehicle approval to a broader category-based approach for vintage vehicles.

$VVC1 Parameters

Collateral Ceiling: 10M
System Wide Credit Limit: $5M
125% collateralization ratio (80% loan-to-value)
Fixed oracle value: $1 per token

Vintage Vehicle Collateral Ruleset

Vehicle Eligibility
- Manufactured more than 25 years ago
- Must be in excellent or good condition
- Must have clear title and documentation of ownership
- Must be stored in a secure, climate-controlled facility
Valuation Requirements
- Agreed Value Insurance Policy or Independent third-party appraisal required from qualified appraiser
- Recent purchase price may be used if transaction represents ≥25% ownership stake
- Valuation cannot exceed any agreed value insurance policy
Loan Terms
- Maximum loan term: 5 years
- Loan-to-Value (LTV) ratios:
  - Excellent condition: up to 80% LTV
  - Good condition: up to 60% LTV
  - Good condition with personal guarantee: up to 80% LTV
- Monthly interest payments required
Insurance Requirements
- Comprehensive insurance coverage mandatory
- Lending Partner must be named as additional insured
- Coverage must meet or exceed loan value

Loan Administration

Lending Partner

Drive liquidity demand, originate loans, and enforce repayment terms.
Provide updates to collateral appraisals as appropriate, especially following significant market events.
Submit financial reports as necessary to notify the Designee of any material changes in borrower status or collateral conditions.
Verify vehicle title, insurance, and storage facility.
Manage liquidation processes for real-world assets in case of default.

Designee

Oversee record-keeping and validate borrower eligibility.
Mint collateral tokens equal to the value of the collateralized vehicles.
Enforce credit limits and perform any necessary audits of Lending Partner records.

Legal Framework

The ruleset operates within the existing legal framework established by:

Benefits

Scalability: Enables efficient onboarding of multiple vintage vehicle loans without individual governance proposals
Risk Management: Establishes clear parameters for collateral quality and loan terms
Market Opportunity: Addresses demand for financing in the classic/vintage vehicle market while maintaining conservative risk parameters
Standardization: Creates consistent framework for evaluation and monitoring of vintage vehicle collateral

Voting

Upon this proposal’s success, Hifi DAO will execute the necessary variable changes to the Hifi Protocol’s Fintroller and take the necessary technical steps to integrate $VVC1 Tokens into the Hifi Protocol with the set collateral ceiling and fixed oracle value. It is recommended that DAO members review the full agreement for a comprehensive understanding before casting their votes.

The proposal is expected to go live Friday, November 13, 2024 with voting expected to begin on Sunday, November 15, 2024 (48-hour delay).