[PIP-032] Vault updates on all original LST vaults and LRT vaults

Author: Frank Olson
Date: March 16th, 2024

Summary

If this proposal passes, the following changes will occur within the Prisma Protocol:

  • Deprecation to multiple vault types, as itemized below.
  • Deployment of multiple new vault types, as itemized below.
  • Disable emission receivers of the deprecated vaults
  • Enable emission receivers for the new vaults

For more info on the vault updates please read our recent blogpost: Important Vault Updates — Prisma Finance

Motivation

In response to the latest iterations and market conditions, we would like to propose the implementation of crucial updates to our longstanding LST and LRT vaults.

In [PIP-031] we made significant changes to the parameters of collaterals on Prisma bringing Prisma in line with other CDP protocols across the wider ecosystem. The original vaults that Prisma introduced during its launch had a 4% interest rate cap, the newer vaults we introduced in [PIP-019] improve the range of tools available to help maintain the mkUSD & ULTRA price peg.

The new LRT vaults have been introduced with some optimizations to redemptions making it more efficient.

Specification

  1. On the original wstETH vaults:
  • Reduce maximum debt to 0
  • Disable emission receivers
  1. On the original rETH vaults:
  • Reduce maximum debt to 0
  • Disable emission receivers
  1. On the original cbETH vaults:
  • Reduce maximum debt to 0
  • Disable emission receivers
  1. On the original sfrxETH vaults
  • Reduce maximum debt to 0
  • Disable emission receivers
  1. On the original weETH vaults:
  • Reduce maximum debt to 0
  • Disable emission receivers
  1. On the original ezETH vaults:
  • Reduce maximum debt to 0
  • Disable emission receivers
  1. On the original rsETH vaults
  • Reduce maximum debt to 0
  • Disable emission receivers
  1. Deploy a new rETH vault with the following parameters:
  • Maximum debt of 60 million
  • Interest rate of 15%
  • Base mint fee of 0%
  • Base redemption fee of 1%, paid entirely to the troves that are redeemed against
  • Mint emissions disabled
  1. Deploy a new cbETH vault with the following parameters:
  • Maximum debt of 10 million
  • Interest rate of 15%
  • Base mint fee of 0%
  • Base redemption fee of 1%, paid entirely to the troves that are redeemed against
  • Mint emissions disabled
  1. Deploy a new weETH vault with the following parameters:
  • Maximum debt of 20 million
  • Interest rate of 20%
  • Base mint fee of 1%* (During migration mint fee is set at 0%)
  • Base redemption fee of 5%,
  1. Deploy a new ezETH vault with the following parameters:
  • Maximum debt of 20 million
  • Interest rate of 20%
  • Base mint fee of 1%* (During migration mint fee is set at 0%)
  • Base redemption fee of 5%,
  1. Deploy a new rsETH vault with the following parameters:
  • Maximum debt of 10 million
  • Interest rate of 20%
  • Base mint fee of 1%* (During migration mint fee is set at 0%)
  • Base redemption fee of 5%,

Benefits

These changes significantly improve how the DAO can help maintain the peg for mkUSD and ULTRA based on changing market conditions. With mint fees set at 0% it allows for more competitive short-term borrowing on Prisma while increasing fee revenue for PRISMA lockers.

Next Steps

Following community feedback, three snapshot votes will be scheduled to formalize consensus. Upon approval, we will deploy the necessary smart contracts and prepare the on-chain vote.

For more info please read our recent blogpost: Important Vault Updates — Prisma Finance

2 Likes

Happy to see this update. Trove migrations might be temporarily painful, but it is in service of pushing everyone onto a consistent and best-available codebase.

Expecting this change to improve the DAOs ability to manage the protocol while also reducing its overall complexity.

3 Likes