Themis allows users who have a liquidity position with Uniswap v3 to collateralize up to 65% of their LP assets.
This means that if you have $10k in LP assets, you could receive up to $6500 in stablecoins like FRAX to do with as you will. Buy Lambo, go long on Shiba Inu, reinvest right back into your LP, who cares?
A good example would be the FRAX/USDC LP pair, users are able to collateralize their LP and borrow up to 65% in supported stables coins like FRAX and other whitelisted assets, which makes the current FRAX/USDC pair at least 165% more capital efficient.
The success factor of any stablecoin derives from 3 things; community, liquidity, and adoption. The Frax community is no doubt one of the most forward thinking communities out there. You guys are building what will become the future of modern central banking. Themis wants to partner with you guys and allow you to increase your liquidity and adoption.
Potential roadblocks/risks for the Frax community;
Smart contract risks of being exploited. – Our smart contract and business logic have been audited by a reputable 3rd party. Also, we will soon be launching a bounty program with Immunefi.
Borrowers default; risk of default. – We will be whitelisting selected V3 LP pairs that fit our risk model of liquidity, reputation, and volatility to ensure the safety of our lenders. Our liquidation kicks in at 80% ensuring that our borrowers are always over collateralized at any given time. There is minimal risk of being liquidated however, a full or partial repayment back to the loan contract can be made at any time to lower this percentage.
Themis is a new protocol that is currently bootstrapping its lending liquidity via Lockdrop & LBA pioneered by the Delphi Digital team and utilized by Astroport which has had huge success bootstrapping >$1b in AMM and >$110m in their LP. We have 64,000,000 which is 8% of our total supply to be given to our stable coin lenders. And, it’s a great way for the AMO to earn not just organic interest but also Themis’ governance tokens without risk of impermanent loss or volatility.
With that said, we’re applying for $10m to kickstart the protocol. All funds will be locked via smart contract for 9 months which will then be deployed onto our lending pools. Deadline is the 16th of Jan due to the lockdrop and funds will be deployed after our LBA is done which is after the 28th of Jan.
We plan to submit a snapshot proposal, but we’d like to hear from the community first. Is this the kind of partnership you’re aiming for to grow FRAX adoption?