[IDEA] dLend - A Loan Module for Vested rLP Loans



dLend allows users to borrow DAI tokens (DAI in this example) using their rLP tokens as collateral. The module is designed to incentivize liquidity provision in the Delta ecosystem, while also providing users with a way to acquire DAI without having to sell their rLP tokens.

Module Overview:
Upon depositing their rLP tokens into the loan module, users’ rLP tokens will remain locked until the borrowed DAI tokens are fully repaid.

Users receive 10% of their rLP deposit immediately in DAI. The remaining DAI tokens will vest over time based on a block number schedule until reaching the liquidation threshold.

Users will receive a DAI loan that is increasing over time until reaching the liquidation threshold which if reached and the loan is not repaid the underlaying rLP is burned or sent to the DFV.

Loan Terms:
To prevent abuse of the system, there will be a limit on the amount of DAI tokens that can be borrowed based on the user’s initial rLP deposit. For example, the loan-to-value ratio could be set to 50%, meaning that a user can only borrow up to 50% of the value of their rLP deposit upfront and the rest is vested slowly until reaching the liquidation threshold.

To incentivize users to participate in the loan module, there will be a small interest rate charged on the borrowed DAI tokens. This interest rate could be distributed to rLP and Delta token holders as a form of yield.To further incentivize liquidity provision in the Delta ecosystem, a portion of the interest earned from the loan module could be sent to the DFV to reward liquidity providers. Also the opposite could be the case as well this could involve interest free loans because essentially you are slowly selling the rLP tokens but a small interest could also work.

Module Benefits:
Allows users to borrow DAI without having to sell their rLP tokens, which maintains liquidity in the Delta ecosystem.

Provides users with a safe and secure way to access DAI by using their rLP tokens as collateral.

Encourages liquidity provision in the Delta ecosystem by rewarding users with interest on their borrowed DAI and by sending a portion of the interest earned to the DFV to incentivize liquidity provision.

Provides a deflationary mechanism for rLP tokens by burning them if the loan is not repaid.

Delta Lend could be a powerful tool that enables users to borrow tokens using their rLP tokens as collateral while maintaining liquidity in the Delta ecosystem. The module incentivizes liquidity provision and provides users with a safe and secure way to access DAI. By burning rLP tokens if the loan is not repaid, Delta Lend provides a deflationary mechanism that benefits the entire Delta ecosystem.

April 6, 2023, 6:48pm2
More great work by you. Question, how is the value of rLP derived?

iamcapoteApril 6, 2023, 7:02pm3
Just like coreDAO, rLP were originally an LP so there is Delta/wETH in every LP in a way. you could device a way to derive the value from there.

PastaSauceApril 6, 2023, 7:27pm4
Seems like it would be super easy to implement, most of the work is basically already done with cLend. X3 mentioned, many times, that loans would be available for Delta as they were for Core.

1 Like
April 12, 2023, 6:51am5
Not intending to take a piss on your idea, so if that is how it is perceived I apologize.

Why not just add rLP as collateral in cLend?

I suggested that earlier here:

Suggestion: Offer loans on rLP in cLend. Main area of impact: Fees and Treasury. Background and crude introductionary reflection: This suggestion will have a lot of background information about the DFV and digressions here, so please have patience with me. I have been holding rLP’s since LSW, and DCA’ed massively ever since. I have been frustrated that loans have not been added as collateral in cLend, until I mapped out the entire Delta/rLP DFV math in excel and realized that doing so, coul…
If there are big advantages that you achieve with doing vested loans compared to just lending regularly on it like CORE and coreDAO then I would love to learn. :slight_smile:

April 13, 2023, 7:50pm6
the cLend module is a normal loan module. the dLend module would be a completely different module operating on an OVL system. the whole idea of the Delta Ecosystem is OVL so with this proposal i am suggesting that its an idea worth exploring because of its potential benefits.

the main differencen between the two is instant loans for cLend versus vested loans for dLend. the main benefit i see is that the liquidity is slowly exiting the system instead of instantly as is in the case with cLend. this slow release of liquidity has the same potential benefits of OVL. hope this makes sense.

April 14, 2023, 7:25pm7
So then you are not charging the 20% interest rate on the loan as the “regular” cLend?

April 15, 2023, 4:18pm8
I am not suggesting a specific interest rate thats not up to me to decide. you could charge 20%, more or nothing since the design is different not sure which one is more suitable.

i was just bringing up a different and potentially viable option of making loans for rLP. if the overall design of this module proves valuable to devs i think they need to test several interest scenarios before committing to one.