[DAO:7gy6x24] Would you support funding Decentraland community operations through loans on Fringe Finance?

by 0xb77af992749615e989acb2ce3d40f748f07b8de8 (Hardcore#8de8)

Fringe Finance is offering the Decentraland DAO to use MANA tokens as collateral to borrow up to $10,695,406 in USDC to be utilized at the discretion of the DAO.

Abstract:

Fringe Finance is a decentralized money market designed to unlock the capital spread in crypto assets regardless of their capitalization and supported networks.

Recently Fringe Finance announced that on the 5th of August MANA token will be integrated as a collateral asset allowing holders to access USDC loans.
The benefits for MANA token holders and the Decentraland DAO are described below.
Motivation:
Borrowing against MANA to fund the DAO’s operations instead of selling benefits all the holders by removing selling pressure.
The Decentraland DAO borrowing against its MANA holdings, rather than selling them, both signals alignment and better align its interests with those of MANA holders.
USDC is one of the most trusted stablecoins on the market with deep liquidity.

Fringe Finance announced the integration of MANA on the 5th of August MANA as a collateral asset to borrow USDC.

Fringe Finance provides added utility for all holders of MANA including the Decentraland DAO by allowing them to borrow USDC against their MANA.

The MANA community can utilize borrowed USDC funds elsewhere in the crypto ecosystem without the necessity to sell MANA tokens.

Specification:

MANA has been assigned a loan-to-value ratio of 43% on Fringe Finance. This means that for every $1000 worth of MANA collateral a $430 loan can be taken.
The current borrowing interest is 2.34%/year, but the rate is currently floating(*).
The borrowing limit for MANA on Fringe Finance is currently $10,695,406.

Steps:

Deposit sufficient MANA token collateral on the Fringe Finance platform from the treasury.
The corresponding USD-denominated line of credit is issued.
Up to $10,695,406 USDC loan can be taken and used by the Decentraland DAO.
Announce the taken loan on social media and official blog. If the loan will not take place announce the additional utility of the Fringe Finance integration for the community.

Benefits:

Reduced selling pressure on the market
Signals the additional utility to MANA holders in that they can access stablecoin loans
Fund DAO operation by locking MANA tokens and increasing cash flow

About Fringe Finance:

We‘re partners with projects such as Polygon, Chainlink, REN, Elrond, Bancor, IoTeX, Lido, and others.

Fringe Finance has twice been audited by respected firms.

On Fringe, borrowers deposit collateral against which they may take out loans in a select set of the most liquid and reliable USD stablecoins. The resultant benefit for borrowers on Fringe Finance is that they have access to deep, unfragmented capital pools from which to borrow. This significantly reduces both the interest rate slippage they can expect when taking out a loan, in addition to reducing interest rate volatility over the course of their loan.

Fringe’s depth and concentration of lending capital liquidity also benefit lenders, as it similarly reduces the interest rate slippage they can expect to experience when depositing capital as well as reducing fluctuations in the interest paid on their capital. This indirectly benefits borrowers, as lending on Fringe becomes more attractive, resulting in more capital being available at lower interest rates.

An additional indirect benefit for borrowers is that Fringe’s platform employs empirically sound custom algorithms to determine lending parameters so as to maximize platform stability. This attracts lenders to the platform and therefore results in greater capital available for borrowers.

  • Support funding $MANA community operations on Fringe Finance’s Primary Lending Platform
  • Do not support
  • Invalid question/options

Vote on this proposal on the Decentraland DAO

View this proposal on Snapshot

I’m voting Invalid question/options for the following reasons:

  1. The DAO is well funded through the 10 year vesting contract created In Feb 2020. With roughly 8 years remaining in the contract, I don’t see a need for the DAO specifically to seek outside lending resources. Learn more about the vesting contract here:
    Decentraland's Vesting Dashboard

  2. The MANA contract was burned, and thus nobody owns it. You do not need anyone’s permission or approval to integrate MANA into your platform if you wish to do so.

Please don’t think that by my voting in this way, I don’t see this as useful to interested community members. It’s my personal belief that this poll isn’t a necessary step which needs to be taken for your platforms’ proposed integration. Additionally I don’t feel the DAO should ‘endorse’ any third party crypto lending platform. The financial decisions of individual community members should remain upon the individual, after they have done ample research.

Thank you for taking the time to create this poll and for your interest in Decentraland and our native currency! Best wishes.

3 Likes

I’m with Frank on this one, DCL has already positioned itself well and it shouldn’t endorse any lenders.

Voting Invalid.

1 Like

Anything involving cryptocurrency and collateral is max sketch and should be avoided at all costs. Plus, as Fancy and XIII pointed out, it’s not really needed.

1 Like

Would you support funding Decentraland community operations through loans on Fringe Finance?

This proposal is now in status: FINISHED.

Voting Results:

  • Support funding $mana community operations on fringe finance’s primary lending platform 1% 819 VP (22 votes)
  • Do not support 74% 593,776 VP (17 votes)
  • Invalid question/options 25% 200,793 VP (10 votes)