Summary of the proposal:

Following the RIP 40 vote on the principles and the launch of development for version 3.5 of the RMM, this proposal approves an initial version of the parameters for Phase 1 of this version's deployment.

During Phase 1, the DAO's participation in debt repayments on the RMM will be under the following conditions:

1. A total budget allocated by the DAO of 50% of its treasury in armmv3USDC and armmv3WXDAI,
2. A 100% participation rate (for every $100 repaid, the DAO contributes $100 to migrate the stablecoin debt to dREUSD). This ensures that no residual stablecoins are captured by bots.
3. A DAO participation limit per wallet: Initially set at 100 REUSD, it will double every 15 days compared to the previous period, up to 1600 REUSD (i.e., an increase of 100, 200, 400, 800, and 1600 REUSD every two weeks).
4. REG will be locked, granting a maximum of dREUSD at a ratio of 2 dREUSD per REG.
5. The minimum duration of Stage 1 will be 5 months from its launch.
6. The dREUSD borrowing rate will be 0% throughout Stage 1.

During Stage 1, loans will remain locked; only loan repayments will be possible.

The above parameters may be modified by further votes from the DAO, depending on the program's progress.

Objectives:

During Phase 1, borrowers will have the option to repay their debts with a contribution from the DAO, which will migrate a portion of their debt from stablecoins to dREUSD debt.

The benefit for the borrower is that the dREUSD debt will be at 0%, unlike the stablecoin debt (value voted on separately).

The parameters voted on for Phase 1 represent a compromise between the DAO's resources, the program's attractiveness, and its accessibility to all.

They were also determined through a forum poll.

Motivation/Context:

For each parameter, the compromises that led to the proposed values ​​were as follows:

• Budget allocated by the DAO to this program (see limit #4 in the original text) The DAO's treasury currently holds 116K armmv3USDC and 97K armmv3WXDAI. Allocating half of the available funds is a significant amount while still preserving budget for other DAO activities. DAO participation rate for each repayment. The initial target (see survey) was increased to 100% to ensure that all provided stablecoins are used (without bot preemption).
• DAO participation limit per wallet (see limit #3 in the original text). Again, a lower limit, e.g., DAO budget divided by the number of borrowers (with a $106K budget and 1,500 borrowers, this would be $70...), might not be very motivating. Conversely, a higher limit (e.g., $1,000) could restrict the number of borrowers who can benefit from the program. The proposed solution is a phased approach: We start with a low limit (100 REUSD), which we gradually increase to the maximum (1600 REUSD) over 2.5 months.
• dREUSD/REG ratio per redemption (see limit #2 in the original text) The initial proposal recommended a ceiling of 2 dREUSD per locked REG. If the REG price were to increase significantly, a new vote would be required.
• Minimum duration of Phase 1 During this entire phase, the migration program is active, the dREUSD rate is at 0%, and the stablecoin rates are at values ​​voted on separately. After 2.5 months, the limit per wallet is at its maximum. An additional 2.5 months could be allocated to allow for a potential increase in stablecoin rates to solidify the benefits of the migration program. The minimum duration of Phase 1 would then be 5 months.

Technical Details:

The parameters were described above using the terms from the v3.5 description in RIP 40.

Since then, development has progressed, and some terms have changed.

The translation of the previous values ​​into contract parameters is as follows:

• DAO Budget: A budget of 50% of the current treasury yields 48,330 armmXDAI and 57,865 armmUSDC, which will be the GlobalMintCap parameter values ​​for WXDAI and USDC.
• DAO Participation: A 100% participation results in a factorREUSD value of 5,000 (50%), as it applies to the amount repaid, including participation.
• Maximum Participation per Wallet: The contract has several parameters for this: a limit per stablecoin (userMintCap) and a global limit for all stablecoins (totalUserSubsidizedReusdMintCap). The initial 100 REUSD will be the value of the totalUserSubsidizedReusdMintCaps parameter. This will be the maximum for both USDC and WXDAI stablecoins. The userMintCap parameters will have the same value, so that this limit can be reached even if only one stablecoin is used. These values ​​will be increased based on the voting progress.
• dREUSD per REG ratio: The factorREG parameter is also applied to the total amount, including participation. The value corresponding to a ratio of 2 dREUSD per REG will be 2500 (25%).
• Duration of Stage 1: In the contract, the period corresponding to Stage 1 (enabling debt migration) corresponds to phases 1 and 2. The 5 months will therefore be the duration of phases 1 and 2 of the contract.

For the REUSDPoolManager smart contract to withdraw the funds from the DAO Treasury, the corresponding approvals are included in the proposal and will be executed automatically if a vote is positive.

Implementation Phase:

• Preliminary discussions on the Forum: since March 17th regarding the RIP 40 Proposal and since March 28th regarding this proposal: duration 15 days.
• Proposal submitted to the vote: April 11th, duration 10 days.
• Depending on the result, the parameters are applied (by RealT) and Phase 1 is launched.

Team involved:

• RealT (@Michael): Application of the new RMM parameters, development of RMM version 3.5.
• Proposer: Assistance in drafting the proposal and voting.
• DAO Member: Preliminary discussions on the Forum, then voting.

Budget:

This proposal does not require a DAO budget. DAO revenues (from RMM) will be lower.

Roadmap:

• Development and testing of RMM version 3.5 (following the favorable vote on RIP 40),
• Vote on the parameters of RMM 3.5 Stage 1 (the subject of this proposal),
• Vote on stablecoin rates (RIP 42),
• Launch of Stage 1 and the migration program (with DAO participation),
• Vote on the evolution of stablecoin rates,
• Progress to the next stages of version 3.5 deployment.

Key terms:

• RMM version 3.5: Added features (optional) to incentivize debt repayment on the RMM through DAO participation.
• DAO participation: During Phase 1 of the v3.5 rollout, a $100 repayment in stablecoin will grant the right to $100 (100 * 100%) in DAO participation, allowing the migration of stablecoin debt to dREUSD.
• RMM debt: Two debts will be available on the RMM:
  • One in stablecoin (at a variable rate, the maximum of which is voted on separately);
  • and one in dREUSD with a rate of 0% during Phase 1 of the v3.5 rollout.
• Limitations to the migration program: A borrower's dREUSD debt will be limited by: its repayment in stablecoin, the budget allocated to the program, the number of REGs locked (at a ratio of 2 dREUSD per REG), and a limit per wallet.
• Original text: Detailed terms and concepts on the proposal: https://forum.realtoken.community/d/122

https://forum.realtoken.community/d/127