NOTE: This SIP has been moved to rejected as there is a planned SIP to create a generic implementation of a wrapperfactory to support any wrapped assets.
\nAllow users to wrap LINK to mint sLINK
\nThis SIP proposes to deploy a new wrappr as per SIP-112 (ETHwrappr) that will accept deposits of LINK and mint sLINK.
\nThe Curve LINK/sLINK pool has deep liquidity but sLINK remains unbalanced in the pool causing sLINK to trade above par against LINK. sLink has been a top three Synth by open interest for most of this year so there is a significant positive skew that can be offset through the introduction of a LINKwrappr.
\nsLINK is minted whenever a user deposits LINK into the contract. The user can deposit any amount, however, this is subject to not exceeding the maxLINK configurable via SCCP.\nThere is no duration, interest rate or collateralization ratio, as any user can at any time buy back LINK available in the contract by burning sLINK.\nMinters benefit as minting sLINK and burning sLINK are subject to a mintingFeeRate and burningFeeRate, both of which are paid to the fee pool after conversion into sUSD.
Adding additional wrappr contracts to support new assets will help expand the total Synth supply, LINK is one of the most liquid ERC-20 tokens and is therefore a good wrappr candidate.
\nTwo contracts are required to be deployed:
\nLINKWrapper.sol which is able to mint sLINK against LINK deposited and release LIK against sLINK burned.The entry points for users on LINKWrapper.sol implements the following interface.
interface LINKWrapper.sol {\n function mint(uint amount) external;\n function burn(uint amount) external;\n}\nThe upper bound on the amount of Minting is determined with a helper function, capacity, defined by max(maxLINK, 0) with LINK being the amount locked in the contract. In case the user attempts to mint an amount greater than the upper bound, then capacity is minted and the residual is returned to the user (please refer to test cases for calculation specs).
The upper bound on the amount of Burning is computed as LINK locked in the contract multiplied (1+burnFeeRate) (please refer to test cases for calculation specs).
mintFeeRate and burnFeeRate are both bounded between 0% and 100%, inclusive.
u amount of LINK and the contract has c amount of LINK in spare capacity\nu is larger than or equal to c\nu LINK into the contract\nc LINK is locked up in the contractc(1-mintFeeRate) is minted into the user's wallet in sLINK\nc*mintFeeRate worth of sLINK is sent to the fee pool in the form of sUSDu - c worth of LINK is refunded back to the useru is strictly lower than c\nu LINK into the contract\nu LINK is locked up in the contractu(1-mintFeeRate) is minted into the user's wallet in sLINKu*mintFeeRate worth of sLINK is sent to the fee pool in the form of sUSDmaxLINK is locked in the contract\nu amount of sLINK and the contract holds c amount of LINK\nu is larger than or equal to c(1+burnFeeRate)\nu sLINK and flagging withdrawal in LINK\nc LINK is sent to the userc sLINK is burnedc * burnFeeRate worth of sLINK is swapped to sUSD and sent to the fee poolu - c(1+burnFeeRate) worth of sLINK is refunded back to the useru is strictly lower than c(1+burnFeeRate)\nu sLINK and flagging withdrawal in LINK\nu (1-burnFeeRate) worth of LINK is sent to the useru * burnFeeRate worth of sLINK is swapped to sUSD and sent to the fee poolu (1 - burnFeeRate) sLINK is burnedFor the wrappr contract, the following values must be set:
\nmaxLINK the maximum amount of LINK held by contract.mintFeeRate the fee for depositing LINK into the contract.burnFeeRate the fee for burning sLINK and releasing LINK from the contractIt is expected that arbitrage will be capturd via flashbots once this new contract is deployed, therefore, to maximise the fees to stakers the following process is proposed for the deployment. Post deployment stage multiple pDAO transactions to progressively decrease fees and increase the cap in the following increments:
\nmaxLINK 0 - 2.5m LINK in 250k incrementsmintFeeRate 75bp - 25bp in 5bp incrementsburnFeeRate 5bpCopyright and related rights waived via CC0.
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