Comprehensive BUSD offboarding plan on Astar EVM

Discussion
1

Title

BUSD offboarding plan on Astar EVM

Author

@SeiyaChida (Starlat Chan Initiative)

Summary

The plan involves a phased approach to remove BUSD liquidity from Starlay on Astar EVM and transition to other assets. This is due to regulatory developments affecting BUSD.

Motivation

Following regulatory actions by the SEC and NYDFS, and Binance’s decision to cease support for BUSD, it’s crucial to offboard BUSD from Starlay to maintain the platform’s stability and compliance.

Specification

1. Freezing BUSD and lower the LTV and liquidity threshold

Freeze operations include no new supply, borrow, but allow repayments, withdrawals, liquidations, and interest accrual. Additionally we lower LTV and LT of BUSD in the Astar EVM pool.

  • Freeze operation
  • Decrease LTV from 80% to 75%
  • Decrease LT from 85% to 80%

2. Offboarding plan and parameter changes:

Encouraging users to withdraw or repay BUSD. We recomend the following parameter.

  • Phase 1:
    • Decrease LTV from 75% to 0%
    • Lower liquidation threshold to 70%
    • Increase Liquidation Bonus from 5% to 10%
    • Decrease uOptimal from 80% to 20%
    • Increase reserveFactor from 10% to 99.9%
    • Increase base rate from 0% to 3%
    • Increase slope 1 from 4% to 7%
    • Increase slope 2 from 100% to 200%
  • Phase 2:
    • Remain LTV at 0%
    • Remain Liquidation Bonus at 10%
    • Decrease uOptimal from 20% to 2%
    • ReserveFactor remains at 99.9%
    • Base rate remains at 3%
    • Slope 1 remains at 7%
    • Increase slope 2 from 200% to 300%
  • Phase 3:
    • Remain LTV at 0%
    • Remain Liquidation Bonus at 10%
    • Decrease uOptimal from 2% to 1%
    • ReserveFactor remains at 99.9%
    • Increase base rate from 3% to 100%
    • Increase slope 1 from 7% to 70%
    • Slope 2 remains at 300%

※ We’ll discuss the rate of liquidation threshold for the phase2 and phase3 once the each forum is initiated

Conclusion

Implementing this offboarding plan is essential for transitioning away from BUSD, ensuring Starlay’s adaptability and resilience in the face of changing market and regulatory conditions.

Next Action

If this looks like community is in favor, we will proceed the following discussion accordingly

  • Freezing BUSD and lower the LTV and Liquidity threshold
  • Offboarding plan and parameter changes
3 Likes
2

I believe we need to lower LTV to 75% and LT to 80% of BUSD in the Astar EVM pool at the freezing phase and then we proceed to the Offboarding plan. I adjusted the parameter and modified the parameter above accordingly.