Summary
The Ribbon Multisig is currently holding [1] the 3M USDC raised from the bond issuance earlier this year [2]. We raised the funds for two reasons:
- bootstrap the supply-side of the Ribbon Fuse pool [3] to allow users to lever up and borrow USDC against their ETH covered call position. Shortly after we raised the funds, Rari fuse pools got hacked and the Rari team proceeded to place a global pause on borrowing across all existing pools and pools deployed afterwards such as ours. This makes supplying the fuse pool now pointless as users cannot borrow the funds. We don’t expect borrowing to be unpaused any time in the near future.
- lend in Maple Finance [4]. Shortly after we raised the funds, it became public that the hedge fund Three Arrows Capital not only blew up but also had been borrowing hundreds of millions of dollars unsecured from multiple creditors in the process. Sentiment towards uncollateralized lending both on-chain on Maple and off-chain turned negative as the contagion risk was unclear. We still set up a snapshot proposal [5] to deposit into Maple but it was overwhelmingly voted down.
We suggest to repay bond holders at this time rather than at maturity in December.
Proposal
We will set up several OTC offers (at various sizes) via airswap [6] to exchange the ERC-20 bond tokens held by the bondholders for the USDC held in the treasury. The interest the bondholders earned from date of issuance (June 7, 2022) up until date of OTC will be included in the swap rate. The bondholder will be able to permissionlessly and anonymously exchange their bonds for USDC. There are currently 12 bondholders [7].
Any bondholder has the option to either accept this offer or keep the bonds and continue to earn interest until maturity in December.
Once bonds are in our possession, we will burn the ERC-20 bond tokens to be able to redeem a proportional amount of the $RBN collateral custodied in the bond contract [8].
Conclusion
This is a win-win proposal for the protocol and the bond buyers. The protocol will not need to pay interest on bonds that are exchanged from time of OTC up until maturity in December. Similarly, the bond buyer will have liquidity from time of OTC until December to deploy the USDC in any way they see fit.
If you are a bondholder and have any questions about the arrangement, please contact us on Discord.
Voting
This proposal will be posted on the forum for 1 week prior to voting. Voting will then be open on Snapshot for 5 days. This vote will be a single choice vote. You may vote on the proposal by selecting “Yes, let’s do it” or “No, this is not the way”.
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