Summary:
Compensate for the bad debt from the WFRAX Illamalend Market on Fraxtal.
Author:
Astral Protocol: Increasing liquidity provider returns through layered yield strategies, liquidity pools and yield bearing vault tokens.
Abstract:
Permanently lend crvUSD equivalent to the bad debt in the market OR direct CRV emissions to the pool until lenders have recouped their losses.
Motivation:
While Curve has no direct responsibility for permissionless Illamalend markets, having such a prominent, high TVL market from a close partner of Curve (Frax) get Rekt with bad debt and stay that way is not a good look for the Illamalend Platform.
The current state of the WFRAX lending market is a clear signal that even higher TVL Illamalend markets from reputable protocols are not safe. Which greatly increases the perceived risk factor in lending to virtually all illamalend markets.
The WFRAX Illamalend Market has less then 100K in bad debt, a small price to pay to show investors that Illamalend markets from reputable protocols with significant TVL are generally safe to lend to.
Specification:
Either deposit 95K crvUSD into the WFRAX Illamalend Market on Fraxtal until the bad debt is fully compensated for or direct approximately 15K CRV in emissions per week to the Illamalend market for 1 year.
For:
Increase trust and confidence in the Illamalend Lending Ecosystem.
Against:
It’s Frax’s fault and they should pay for it.
Voting Options:
- Don’t do anything.
- Donate crvUSD to the WFRAX Market.
- Direct CRV to the WFRAX Market
- Propose to FRAX to match them in compensating for the WFRAX market’s bad debt or compensating affected lenders.