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Simple Summary

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This SCCP proposes to increase the minting fee (issueFeeRate) on new ETH backed loans to 2% contract (0x5c8344bcdC38F1aB5EB5C1d4a35DdEeA522B5DfA).

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Abstract

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Setting the minting fee at 2% will effectively raise the cost of minting new sUSD and sETH with ETH as a collateral, no change in fees on closing loans or repaying existing loans.

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Motivation

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The primary motivation is to control the supply of synths in expectation of ramping up the cap of the wrappr and a significant reduction on mintFeeRate. Increasing minting fee on ETH backed loans will allow us to implement SCCP-99 and allow participants to continue to open up new short positions without opening up a gap that allows arbitragers to front-run the wrapper paramater update.\nThat said, the minting fee on ETH backed loans will be reduced back to the original fee of 10 bp, once wrappr is fully deployed.

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Copyright

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Copyright and related rights waived via CC0.

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