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0xec092c15…471asent to0xbeccb6bb…9bf6·#25,882,341·0x5ad09819…12b58f
# Proposal to Increase reUSD LP Market Supply Ceilings on FiRM Forum Link: https://forum.inverse.finance/t/proposal-to-increase-reusd-lp-market-supply-ceilings-on-firm/683 **Summary** This proposal raises the aggregate supply ceiling for the two reUSD LP markets on FiRM from 2,000,000 DOLA to 3,000,000 DOLA. The full increase is directed to the Yearn strategy market, whose ceiling rises from 500,000 DOLA to 1,500,000 DOLA; the OnlyBoost strategy market ceiling is unchanged at 1,500,000 DOLA. Daily borrow limits are equalized at 250,000 DOLA per market, leaving the 500,000 DOLA aggregate daily limit unchanged. All other parameters are unchanged: collateral factor 85%, liquidation factor 100%, liquidation incentive 5%, and minimum debt 3,000 DOLA. This is a measured 50% aggregate step sized to what the underlying liquidity data has sustained, not to its most recent peak. **Background** The reUSD LP markets launched with deliberately conservative ceilings, consistent with the slow-launch posture set out in the [reUSD risk assessment (August 7, 2026)](https://github.com/InverseFinance/Risk-Assessments/blob/main/Resupply_reUSD/FiRM_Assessment_reUSD__Resupply.md). Just over a week after going live, both markets have already filled their combined 2,000,000 DOLA borrow capacity, and organic demand remains. The proposed increase directs the full 1,000,000 DOLA of new capacity to the Yearn strategy market, bringing the two market ceilings to parity at 1,500,000 DOLA each, and equalizes the daily borrow limits at 250,000 DOLA per market. The assessment committed any ceiling expansion to observed liquidity data rather than projection. This proposal is the first application of that commitment. **Data** Since the market launch the RWG has monitored Resupply's capacity through a daily on-chain series covering three indicators, benchmarked against an August 6 baseline: the TVL of the Curve pool underlying the price feed, total reUSD DEX liquidity across all four Curve pools, and aggregate withdrawable backing liquidity (the idle lender-side stablecoins a redeemer could realize across Resupply's lending markets). As of August 25, the price feed pool has grown from roughly $7.9M to $11.1M (+40%), total DEX liquidity from roughly $11.4M to $18.3M (+60%), and withdrawable backing liquidity from roughly $14.6M to $27.9M (+91%). The composite of the three indicators stands at +64% versus baseline and has held at or above +46% for eight consecutive days. Two honest qualifications shape the sizing. First, most of this growth arrived in the second half of August, so the trailing floor of the series over the full observation window sits near the baseline itself; the data demonstrates strong recent capacity, not yet a month of sustained capacity. Second, the largest single contributor to the backing liquidity improvement was a one-day lender deposit into a single Resupply market, which is liquidity that could exit as quickly as it arrived. The RWG tracks a redemption-realizable measure alongside the headline figure and it currently reads about $20M. **Rationale for the sizing** A point-in-time reading of the current data could justify a larger increase. We are deliberately not doing that. FiRM's fixed-rate structure means ceiling decisions are difficult to walk back: if liquidity trends down 50% next month, outstanding fixed-rate positions cannot simply be unwound by a parameter reversal. A 50% step to 3,000,000 DOLA keeps aggregate reUSD exposure well inside the capacity the data has actually sustained, and remains comfortably below the exposure FiRM extends to comparable collateral (the crvUSD market operates at an 87% collateral factor with a 5,000,000 DOLA ceiling, which we treat as the outer bound for reUSD until it accumulates comparable history). Further increases will follow the same discipline. From early September the daily series will span a full 30 days, and subsequent ceiling requests will be benchmarked against the rolling 30-day trailing low of the composite indicator rather than its current value, so growth must persist before FiRM prices it in. |Parameter | Current | Proposed| |--- | --- | ---| |Supply ceiling, Yearn strategy market | 500,000 DOLA | 1,500,000 DOLA| |Supply ceiling, OnlyBoost strategy market | 1,500,000 DOLA | unchanged| |Supply ceiling, aggregate | 2,000,000 DOLA | 3,000,000 DOLA| |Collateral factor | 85% | unchanged| |Liquidation factor | 100% | unchanged| |Liquidation incentive | 5% | unchanged| |Daily borrow limit, Yearn strategy market | 150,000 DOLA | 250,000 DOLA| |Daily borrow limit, OnlyBoost strategy market | 350,000 DOLA | 250,000 DOLA| |Minimum debt | 3,000 DOLA | unchanged| **On-chain actions** 1. Set the supply ceiling of the reUSD LP Yearn strategy market to 1,500,000 DOLA. 2. Set the daily borrow limit of the reUSD LP Yearn strategy market to 250,000 DOLA. 3. Set the daily borrow limit of the reUSD LP OnlyBoost strategy market to 250,000 DOLA.
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# Migrate to ALE v5 # **Migrate to ALE v5** Forum Post: https://forum.inverse.finance/t/migrate-to-ale-v5/681 ## **Summary** This proposal migrates FiRM from the current ALE v4 deployment to ALE v5 following the discovery of an approval-handling bug in ALE v4. ALE v4 relied on persistent approvals between ALE and FiRM markets. Certain inherited helper functions could overwrite these approvals and leave them at zero after use, causing subsequent ALE leverage transactions for the affected market to fail. ALE v5 fixes this by using ad-hoc approvals, approving the exact amount required immediately before each interaction rather than relying on persistent approvals. **ALE v5:** `0x43Fa5E63253b00D5e34f42e711D734A058142055` As with the previous ALE migration, a migration helper will be used to copy the existing market configurations from ALE v4 to ALE v5. The existing DbrHelper will continue to be used. ## **Exchange Routers** ALE v5 will approve both Enso and KyberSwap for swap routing, allowing the FiRM UI to offer both options to users. * **Enso:** `0xF75584eF6673aD213a685a1B58Cc0330B8eA22Cf` * **KyberSwap:** `0x6131B5fae19EA4f9D964eAc0408E4408b66337b5` Odos will not be approved following the shutdown of the protocol. ## **On-chain Actions** 1. Allow ALE v5 on the BorrowController: ``` borrowController.allow( 0x43Fa5E63253b00D5e34f42e711D734A058142055 ); ``` 2. Approve Enso and KyberSwap on ALE v5: ``` newALE.allowProxy( 0xF75584eF6673aD213a685a1B58Cc0330B8eA22Cf ); newALE.allowProxy( 0x6131B5fae19EA4f9D964eAc0408E4408b66337b5 ); ``` 3. Nominate the migration helper as pending governance of ALE v5 and DbrHelper: ``` newALE.setPendingGov(migrationHelper); dbrHelper.setPendingGov(migrationHelper); ``` 4. Execute the migration: ``` migrationHelper.migrate(); ``` This copies the existing FiRM market configurations from ALE v4 to ALE v5 and ensures the relevant markets are approved by DbrHelper. 5. Reclaim governance: ``` newALE.claimPendingGov(); dbrHelper.claimPendingGov(); ``` 6. Disable ALE v4 on the BorrowController: ``` borrowController.deny( 0x39D167Fe676EFC3be49bE874a37349A5D89f9058 ); ``` No user positions, collateral, debt, or FiRM market parameters are changed as part of this migration.
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addMarket(address)# Re-Onboard sDOLA/scrvUSD LP as Collateral # **Proposal to Re-Onboard sDOLA/scrvUSD LP as Collateral** Forum Post: [https://forum.inverse.finance/t/re-onboard-sdola-scrvusd-lp-as-collateral/668](https://forum.inverse.finance/t/re-onboard-sdola-scrvusd-lp-as-collateral/668) ## **Summary** This proposal seeks community support to re-onboard the sDOLA/scrvUSD Curve LP token as collateral on FiRM. The market was previously offboarded due to heightened uncertainty around crvUSD following the launch and rapid growth of Yield Basis. At the time, this effectively reset part of crvUSD’s “lindy” and made it harder to assess the asset under the new operating model. Yield Basis has now been live for a meaningful period, and the original reason for keeping sDOLA/scrvUSD fully offboarded is less compelling. Given the strategic and business benefits of this collateral, it is appropriate to revisit onboarding. ## **Rationale** ### **1\. Strong expected borrow demand** sDOLA/scrvUSD is a high-yield LP, combining: * sDOLA yield * scrvUSD yield * boosted CRV incentives This creates clear looping demand when the net spread versus FiRM borrowing costs is attractive. FiRM benefits most from collateral that users actively want to lever, and sDOLA/scrvUSD fits that profile. ### **2\. Diversification for FiRM** FiRM debt has been falling and has become increasingly concentrated around DOLA/sUSDe. Re-onboarding sDOLA/scrvUSD would add a differentiated source of demand, diversify the collateral base, and help shift current momentum without needing to rely entirely on existing dominant markets. ### **3\. Strategic alignment with Curve** Inverse is deeply embedded in the Curve ecosystem. Curve remains one of the most important venues for DOLA liquidity, routing, and sDOLA growth. Supporting sDOLA/scrvUSD as FiRM collateral strengthens that relationship and reinforces Inverse’s commitment to Curve as a core ecosystem partner. ### **4\. More volume through DOLA** DOLA has historically benefited from being used as a routing and hop asset across Curve pools. In recent months, the number of active DOLA LPs has reduced, particularly with USR and deUSD pools going offline. As a result, DOLA has been doing less volume as a hop token. Re-onboarding sDOLA/scrvUSD would help address this by creating a new deep DOLA-adjacent LP against crvUSD, one of Curve’s highest-volume stable assets. This should support more routing through DOLA, improve DOLA’s role in Curve liquidity paths, and help maintain the volume profile needed for infrastructure such as the Chainlink DOLA price feed. ## **Stake DAO OnlyBoost Escrow** Unlike previous Curve LP markets on FiRM, this market would launch using Stake DAO’s new OnlyBoost escrow rather than the standard Convex escrow. OnlyBoost is a better fit for this market because it optimizes between Stake DAO and Convex boosts, rather than routing deposits exclusively through one venue. Benefits include: * Optimized balance between Stake DAO and Convex boosts * Improved reward capture for depositors * Instant reward crediting after harvest * Continued reward accrual while the LP is used as FiRM collateral * Fee-share benefits for the Inverse Treasury from Stake DAO revenue This makes the re-onboarding more valuable than simply restoring the previous market. It also upgrades the escrow model used for this collateral. ## **Deployment** * Market: [0xC45E9c231ab5D9Bd3F1131E7901B100D8D236C4d](https://etherscan.io/address/0xC45E9c231ab5D9Bd3F1131E7901B100D8D236C4d#readContract) * Escrow Implementation: [0x88df2a32C1130Ae8371Bf6B5d5C644a485FC650B](https://etherscan.io/address/0x88df2a32C1130Ae8371Bf6B5d5C644a485FC650B#code) ## **Parameters** As recommended by [RWG on the forum](https://forum.inverse.finance/t/re-onboard-sdola-scrvusd-lp-as-collateral/668/2): | Supply Ceiling | 5,000,000 | | :---- | :---- | | Daily Borrow Limit | 500,000 | | Collateral Factor | 87% | | Liquidation Factor | 100% | | Liquidation Incentive | 5% | | Minimum Debt Amount | 3,000 |
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https://www.inverse.finance/https://x.com/InverseFinancehttps://discord.com/invite/YpYJC7R5nvhttps://t.me/InverseFinancehttps://app.monolith.market/invUSD.pngInverse Finance DAOInverse Finance is a decentralized autonomous organization (DAO) that develops and manages DOLA, a debt-backed stablecoin, and FiRM, a fixed-rate lending market protocol.
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# Pass Through yETH Recovery Assets to Affected FiRM Users # Pass Through yETH Recovery Assets to Affected FiRM Users Forum Post: https://forum.inverse.finance/t/pass-through-yeth-recovery-assets-to-affected-firm-users/657 ## Summary This proposal seeks to claim Inverse Finance’s allocation from the [Yearn yETH optimistic recovery plan](https://gov.yearn.fi/t/yip-90-yeth-optimistic-recovery-plan/14573/27), and distribute 100% of the received [ysWETH](https://etherscan.io/address/0xe5387cd454dcc542421c069c009d915ab9efaafd) shares to the 4 affected FiRM users pro rata based on their yETH balances at the time of the exploit. Under the Yearn recovery plan, integrator-held balances are claimable by the integrator, with the expectation that the integrator distributes the recovered value onward to the underlying users. Inverse had 4 affected FiRM users with yETH exposure, and these users have since fully repaid their debts. As such, the recovered assets should be passed through to them in full. ## Background The Yearn yETH exploit resulted in a loss of underlying ETH backing yETH. Yearn has since recovered a meaningful portion of these assets and launched an [optimistic recovery plan](https://gov.yearn.fi/t/yip-90-yeth-optimistic-recovery-plan/14573/27) to distribute the recovered value back to affected holders. Recovery eligibility is based on balances at snapshot block `23914085`, and for integrator-held balances the integrator is treated as the claimant. The downstream distribution is then handled by the integrator according to its own governance process. Inverse had 4 users on FiRM with yETH exposure at the time of the exploit. These users are included in the Yearn recovery plan. Since all 4 users have now fully repaid their debts, there is no remaining protocol debt to offset, and the recovered assets should therefore be returned to the affected users directly. The [Yearn recovery claim contract](https://etherscan.io/address/0x9564850c7090B13794e6d1164B0826C0aEFf3143) allows claimants to call `claim(false)`, which mints [ysWETH](https://etherscan.io/address/0xe5387cd454dcc542421c069c009d915ab9efaafd) recovery vault shares to the claimant address. The number of ysWETH shares received cannot be known in advance, because the amount of shares minted depends on the recovery vault share price at execution time, and DAO governance execution is not instantaneous. To handle this cleanly, a simple helper contract has been deployed at [0xFeB4763867Ce21506bE8037eF4f10737E12fDF2e](https://etherscan.io/address/0xFeB4763867Ce21506bE8037eF4f10737E12fDF2e). The helper can only be called by the [Inverse Treasury](https://etherscan.io/address/0x926dF14a23BE491164dCF93f4c468A50ef659D5B), reads the Treasury’s full ysWETH balance at execution time, and distributes 100% of that balance pro rata to the 4 affected users. It does not custody funds itself, instead using `transferFrom(Treasury, user, amount)`, and is single-use. This avoids the need to predict the amount of ysWETH in advance and ensures the full recovered balance is distributed in one execution flow. ## Distribution The distribution will be based on each user’s yETH balance at the time of the exploit. | User | yETH balance | Share | |---|---:|---:| | `0xC95f235896F5a82486Ab645596fC29b76e52900c` | 196.178283039425670085 | 52.572498% | | `0x3C9F71Ae57FEA4a2E38C9d413705Ed1FDcD9e3Da` | 121.518520195354211134 | 32.564930% | | `0xaE79f0562C2128cC12d0ac068aC288856Fe0e1AB` | 0.966854089014142159 | 0.259101% | | `0xc989Df5B623fa84E57e99eC9006283510Ea8C2eC` | 54.493967510951575023 | 14.603472% | Total yETH balance: `373.157624834745598401` ## Contracts - [yETH recovery claim contract](https://etherscan.io/address/0x9564850c7090B13794e6d1164B0826C0aEFf3143): `0x9564850c7090B13794e6d1164B0826C0aEFf3143` - [ysWETH](https://etherscan.io/address/0xe5387cd454dcc542421c069c009d915ab9efaafd): `0xe5387cd454dcc542421c069c009d915ab9efaafd` - [distributor helper](https://etherscan.io/address/0xFeB4763867Ce21506bE8037eF4f10737E12fDF2e): `0xFeB4763867Ce21506bE8037eF4f10737E12fDF2e` - [Inverse Treasury](https://etherscan.io/address/0x926dF14a23BE491164dCF93f4c468A50ef659D5B): `0x926dF14a23BE491164dCF93f4c468A50ef659D5B` ## On-Chain Actions - call `claim(false)` on the [Yearn yETH recovery claim contract](https://etherscan.io/address/0x9564850c7090B13794e6d1164B0826C0aEFf3143) from the Treasury - approve the [distributor helper](https://etherscan.io/address/0xFeB4763867Ce21506bE8037eF4f10737E12fDF2e) to spend [ysWETH](https://etherscan.io/address/0xe5387cd454dcc542421c069c009d915ab9efaafd) from the Treasury - call `execute()` on the [distributor helper](https://etherscan.io/address/0xFeB4763867Ce21506bE8037eF4f10737E12fDF2e), distributing 100% of the Treasury’s ysWETH balance to the 4 affected users pro rata - reset the helper’s ysWETH allowance back to `0`
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# Grant TWG Allowance for Treasury Yearn Vault Positions # Proposal to Grant TWG Allowance for Treasury Yearn Vault Positions Forum Link: https://forum.inverse.finance/t/grant-twg-allowance-for-treasury-yearn-vault-positions/656 ## Summary This proposal requests that the DAO grant the TWG onchain allowances for the Treasury’s holdings of Yearn vault positions. The purpose of these allowances is to allow the TWG to actively manage these Treasury assets, primarily by unwinding them into DOLA where appropriate in order to derisk the balance sheet, increase Treasury flexibility, and support broader Treasury management operations. ## Background The Treasury currently holds a number of Yearn vault positions that have accumulated as part of Inverse’s partnership and integrations with Yearn. These positions are strategically important to the DAO. Back in Q1 2025, the TWG negotiated a 65% fee share with Yearn for Yearn vaults integrated onto FiRM, and as a result a large portion of the Treasury’s balance in these assets has come from that arrangement. Over the past year, this has brought in an additional \~$80k of revenue for the DAO. However, these positions should not remain operationally stranded in the Treasury. Market conditions change, partner risk changes, peg risk changes, and the DAO’s liquidity needs change. The TWG should be able to manage these assets directly and efficiently when prudent. The main use case for this allowance is simple: to unwind Yearn vault positions into DOLA when appropriate, whether to derisk, simplify the Treasury balance sheet, improve stablecoin reserves, or respond more quickly to changing market conditions. ## Proposal Grant the TWG onchain allowance for the Treasury’s current Yearn vault holdings. These allowances would allow the TWG to: * unwind Yearn vault positions into DOLA * reduce exposure to positions where the risk/reward is no longer attractive * respond faster to protocol, partner, or market risk * manage Treasury assets without needing a full governance cycle for each routine operational action These approvals do not give the TWG arbitrary spending authority. They simply allow the TWG to pull the relevant vault tokens from the Treasury as needed to manage and unwind them appropriately. ## On-Chain Actions Grant the following allowances to the TWG: * 3,454 of yvCurve-deUSD/DOLA-f * 1,805 of yvCurve-dola-save-f * 100,000 of yvCurve-DOLA-sUSDe-f * 50,000 of yvCurve-DOLA-sUSDS-f * 18,382 of yvCurve-DOLA/USR-f * 5,000 yvCurve-reusdsdola-f * 5,000 of yvCurve-savedola-f * 4,695 of yvCurve-DOLAwstUSR-f * 199,290 of ysUSDS
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# Proposal to Enable FiRM Market Coverage for jrDOLA Forum Link: https://forum.inverse.finance/t/proposal-to-enable-firm-market-coverage-for-jrdola/639 ## Summary This proposal authorizes the Junior Tranche (jrDOLA) system to provide bad debt coverage for existing FiRM lending markets. All markets will be added simultaneously to the FiRMSlashingModule, subject to the mandatory activation delay period for security. This proposal is designed to execute in parallel with the jrDOLA Launch Proposal, ensuring the insurance mechanism becomes operational immediately upon both proposals passing. ## Background The jrDOLA Launch Proposal configures the core parameters and reward budget for the Junior Tranche system. However, that proposal intentionally excludes FiRM market additions to maintain clean separation of concerns: * Launch Proposal: Sets operational parameters, deploys infrastructure, allocates DBR budget * This Proposal: Connects jrDOLA to actual FiRM markets requiring bad debt protection As of this proposal, FiRM operates 20 active lending markets across diverse collateral types. Each market represents potential bad debt exposure that currently impacts DOLA backing directly. jrDOLA creates a buffer layer, absorbing losses before they affect core protocol reserves. ## Coverage Strategy Rationale for comprehensive coverage: 1. Simplicity: Depositors don't need to evaluate which markets are/aren't covered. Coverage is uniform across FiRM, making the value proposition clear. 2. Fair treatment: All FiRM markets benefit from DOLA liquidity. All markets should contribute to (and benefit from) bad debt insurance. 3. Administrative efficiency: Avoid ongoing governance overhead of individual market evaluations. The activation delay and guardian cancellation provide sufficient safeguards. Each market added through this and any future proposal enters a 7-day timelock period before jrDOLA begins covering its bad debt. While in this initiation stage this serves little purpose, in general this delay is designed to: * Gives guardian multisig time to cancel problematic additions if discovered * Prevents zero-day exploits where attacker adds market and immediately creates bad debt * Provides buffer for depositors to exit if they disagree with market additions If and when a FiRM position in a covered market becomes insolvent: 1. Detection: Anyone observes position where debt > collateral value (via oracles) 2. Eligibility check: * Market is active in FiRMSlashingModule (activation delay passed) * Position collateral value < maxCollateralValue (prevents oracle manipulation) * Position debt > minDebt (prevents dust spam) 3. Execution: Permissionless call to slash(market, borrower) 4. Repayment: jrDOLA vault repays bad debt to FiRM market 5. Loss socialization: All jrDOLA depositors absorb loss pro-rata (share value decreases equally) ## Markets to be Added The following FiRM markets will be added to jrDOLA coverage upon execution of this proposal: |Market|Current Borrows (MM) (as of Jan 25th)| | --- | --- | |[sUSDe-DOLA](https://etherscan.io/address/0xb427fC22561f3963B04202F9bb5BCEbd76c14A99)|71.79| |[wstUSR-DOLA](https://etherscan.io/address/0xe4D47Ef77AC2C3FA4019Cd169Ac1Dd9E27cb12E4)|32.21| |[yv-sUSDe-DOLA](https://etherscan.io/address/0x4E264618dC015219CD83dbc53B31251D73c2db1a)|11.14| |[sUSDS-DOLA](https://etherscan.io/address/0xD68d3a44d46dd50BFeBa8Cca544717B76e7C4b29)|5.65| |[sUSDe](https://etherscan.io/address/0x79eF6d28C41e47A588E2F2ffB4140Eb6d952AEc4)|2.39| |[yv-wstUSR-DOLA](https://etherscan.io/address/0x28684485369f7478f42aAA62660123AB5D573537)|1.95| |[scrvUSD-sDOLA](https://etherscan.io/address/0x63D27fC9d463Ed727676367D3F818999962737E8)|1.39| |[cvxCRV](https://etherscan.io/address/0x3474ad0e3a9775c9F68B415A7a9880B0CAB9397a)|1.22| |[wstETH](https://etherscan.io/address/0x3FD3daBB9F9480621C8A111603D3Ba70F17550BC)|0.58| |[INV](https://etherscan.io/address/0xb516247596Ca36bf32876199FBdCaD6B3322330B)|0.49| |[yv-sUSDS-DOLA](https://etherscan.io/address/0x4A33baFA8a31E4ec9649f65646022cAD1957808b)|0.39| |[wBTC](https://etherscan.io/address/0x48BA574Edf0bc4E2E40B529863aaA6a67c264E7C)|0.28| |[st-yCRV](https://etherscan.io/address/0x27b6c301Fd441f3345d61B7a4245E1F823c3F9c4)|0.16| |[CVX](https://etherscan.io/address/0xdc2265cBD15beD67b5F2c0B82e23FcE4a07ddF6b)|0.13| |[cbBTC](https://etherscan.io/address/0x2A256306D8ba899E33B01e495982656884Ac77FF)|0.07| |[yv-scrvUSD-sDOLA](https://etherscan.io/address/0xb8bc1E9c0a2d445bc39d2A745F47619E954dD565)|0.03| |[wETH](https://etherscan.io/address/0x63Df5e23Db45a2066508318f172bA45B9CD37035)|0.01| |[yv-USR-DOLA](https://etherscan.io/address/0xC0086Ff652c67f43F00F0F9C69Ef6c33640C8cCF)|0| |[CRV](https://etherscan.io/address/0x63fAd99705a255fE2D500e498dbb3A9aE5AA1Ee8)|0| |[USR-DOLA](https://etherscan.io/address/0x3Ac5CEbC7A417DB619B85660E4f284f5643DFd5e)|0| ## On-Chain Actions - Call allowedMarkets for all 20 markets in the FiRM Slashing Module contract
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# Proposal to Enable FiRM Market Coverage for jrDOLA Forum Link: https://forum.inverse.finance/t/proposal-to-enable-firm-market-coverage-for-jrdola/639 ## Summary This proposal authorizes the Junior Tranche (jrDOLA) system to provide bad debt coverage for existing FiRM lending markets. All markets will be added simultaneously to the FiRMSlashingModule, subject to the mandatory activation delay period for security. This proposal is designed to execute in parallel with the jrDOLA Launch Proposal, ensuring the insurance mechanism becomes operational immediately upon both proposals passing. ## Background The jrDOLA Launch Proposal configures the core parameters and reward budget for the Junior Tranche system. However, that proposal intentionally excludes FiRM market additions to maintain clean separation of concerns: * Launch Proposal: Sets operational parameters, deploys infrastructure, allocates DBR budget * This Proposal: Connects jrDOLA to actual FiRM markets requiring bad debt protection As of this proposal, FiRM operates 20 active lending markets across diverse collateral types. Each market represents potential bad debt exposure that currently impacts DOLA backing directly. jrDOLA creates a buffer layer, absorbing losses before they affect core protocol reserves. ## Coverage Strategy Rationale for comprehensive coverage: 1. Simplicity: Depositors don't need to evaluate which markets are/aren't covered. Coverage is uniform across FiRM, making the value proposition clear. 2. Fair treatment: All FiRM markets benefit from DOLA liquidity. All markets should contribute to (and benefit from) bad debt insurance. 3. Administrative efficiency: Avoid ongoing governance overhead of individual market evaluations. The activation delay and guardian cancellation provide sufficient safeguards. Each market added through this and any future proposal enters a 7-day timelock period before jrDOLA begins covering its bad debt. While in this initiation stage this serves little purpose, in general this delay is designed to: * Gives guardian multisig time to cancel problematic additions if discovered * Prevents zero-day exploits where attacker adds market and immediately creates bad debt * Provides buffer for depositors to exit if they disagree with market additions If and when a FiRM position in a covered market becomes insolvent: 1. Detection: Anyone observes position where debt > collateral value (via oracles) 2. Eligibility check: * Market is active in FiRMSlashingModule (activation delay passed) * Position collateral value < maxCollateralValue (prevents oracle manipulation) * Position debt > minDebt (prevents dust spam) 3. Execution: Permissionless call to slash(market, borrower) 4. Repayment: jrDOLA vault repays bad debt to FiRM market 5. Loss socialization: All jrDOLA depositors absorb loss pro-rata (share value decreases equally) ## Markets to be Added The following FiRM markets will be added to jrDOLA coverage upon execution of this proposal: |Market|Current Borrows (MM) (as of Jan 25th)| | --- | --- | |[sUSDe-DOLA](https://etherscan.io/address/0xb427fC22561f3963B04202F9bb5BCEbd76c14A99)|71.79| |[wstUSR-DOLA](https://etherscan.io/address/0xe4D47Ef77AC2C3FA4019Cd169Ac1Dd9E27cb12E4)|32.21| |[yv-sUSDe-DOLA](https://etherscan.io/address/0x4E264618dC015219CD83dbc53B31251D73c2db1a)|11.14| |[sUSDS-DOLA](https://etherscan.io/address/0xD68d3a44d46dd50BFeBa8Cca544717B76e7C4b29)|5.65| |[sUSDe](https://etherscan.io/address/0x79eF6d28C41e47A588E2F2ffB4140Eb6d952AEc4)|2.39| |[yv-wstUSR-DOLA](https://etherscan.io/address/0x28684485369f7478f42aAA62660123AB5D573537)|1.95| |[scrvUSD-sDOLA](https://etherscan.io/address/0x63D27fC9d463Ed727676367D3F818999962737E8)|1.39| |[cvxCRV](https://etherscan.io/address/0x3474ad0e3a9775c9F68B415A7a9880B0CAB9397a)|1.22| |[wstETH](https://etherscan.io/address/0x3FD3daBB9F9480621C8A111603D3Ba70F17550BC)|0.58| |[INV](https://etherscan.io/address/0xb516247596Ca36bf32876199FBdCaD6B3322330B)|0.49| |[yv-sUSDS-DOLA](https://etherscan.io/address/0x4A33baFA8a31E4ec9649f65646022cAD1957808b)|0.39| |[wBTC](https://etherscan.io/address/0x48BA574Edf0bc4E2E40B529863aaA6a67c264E7C)|0.28| |[st-yCRV](https://etherscan.io/address/0x27b6c301Fd441f3345d61B7a4245E1F823c3F9c4)|0.16| |[CVX](https://etherscan.io/address/0xdc2265cBD15beD67b5F2c0B82e23FcE4a07ddF6b)|0.13| |[cbBTC](https://etherscan.io/address/0x2A256306D8ba899E33B01e495982656884Ac77FF)|0.07| |[yv-scrvUSD-sDOLA](https://etherscan.io/address/0xb8bc1E9c0a2d445bc39d2A745F47619E954dD565)|0.03| |[wETH](https://etherscan.io/address/0x63Df5e23Db45a2066508318f172bA45B9CD37035)|0.01| |[yv-USR-DOLA](https://etherscan.io/address/0xC0086Ff652c67f43F00F0F9C69Ef6c33640C8cCF)|0| |[CRV](https://etherscan.io/address/0x63fAd99705a255fE2D500e498dbb3A9aE5AA1Ee8)|0| |[USR-DOLA](https://etherscan.io/address/0x3Ac5CEbC7A417DB619B85660E4f284f5643DFd5e)|0| ## On-Chain Actions - Call allowedMarkets for all 20 markets in the FiRM Slashing Module contract
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setReplenismentIncentiveBps(uint256)setReplenismentIncentiveBps(uint256)# Reduce the DBR Replenishment Incentive [2/2] # Proposal to Reduce the Replenishment Incentive Forum Post: https://forum.inverse.finance/t/reduce-the-dbr-replenishment-incentive/625 ## TL;DR * Reduce `replenishmentIncentiveBps` on FiRM markets from 5000 → 1000 (50% → 10%). * Borrowers still pay the same replenishment cost; we only change how it’s split between replenisher vs DAO. * The DAO Treasury’s share of replenishment revenue goes from 50% → 90%. ## Background When a user has a DBR deficit, anyone can call `forceReplenish` on the market: * The user incurs a replenishment cost in DOLA (added to their debt). * A share of that cost, controlled by `replenishmentIncentiveBps`, is paid to the caller as `replenisherReward`. * The DAO Treasury effectively captures the rest via the market/lender setup. In the Market contract, this is: `uint replenisherReward = replenishmentCost * replenishmentIncentiveBps / 10000;` FiRM launched with replenishmentIncentiveBps \= 5000 (50%) to bootstrap keepers and make sure deficits are cleared quickly. ## Motivation 1\. Keeper ecosystem is already competitive After almost three years live, FiRM is fully integrated into multiple bots and keeper stacks: * Replenishments are already highly competitive on larger positions. * The original 50% incentive has done its job as a bootstrap parameter. We no longer need to give away half the revenue to maintain healthy replenishment activity. 2\. Treasury is overpaying for the same outcome The borrower always pays 100% of the replenishment cost as new DOLA debt. This proposal only changes the split: * Before: 50% to caller, 50% to DAO * After: 10% to caller, 90% to DAO 3\. 10% is still enough to keep things running We don’t want to push incentives so low that: * Small deficits remain unreplenished for a long time, or * Gas economics no longer make sense for callers. At 10%: * Larger deficits still pay a meaningful absolute reward. * Existing bots already monitor FiRM, so infra cost is largely sunk. * If we ever observe persistent unreplenished deficits or degraded behavior, governance can revisit the parameter. ## On-Chain Actions For all active FiRM markets (of which there are 28 currently, so this will be split into 2 on-chain proposals, of 14 markets each), defined as markets that: * have `totalDebt > 100 DOLA`, or * have `borrowPaused == false`, perform: * `setReplenismentIncentiveBps(1000)` This sets `replenishmentIncentiveBps` to 10% on those markets, shifting replenishment revenue to 90% DAO / 10% caller without changing DBR pricing, liquidations, or user-facing mechanics.
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# Update the INV Price Feed - 2 # Update INV Price Feed to Dynamic-Fee INV/WETH Curve Oracle Forum Post: https://forum.inverse.finance/t/update-the-inv-price-feed-2/628 ## Summary This proposal updates the INV/USD price feed used by FiRM and Frontier to: 1. Migrate from the current [INV/WETH](https://etherscan.io/address/0x6bd88c57523bf138a19b263e8ebc8661c836b171) Curve pool to the new higher-fee [INV/WETH](https://etherscan.io/address/0xdcd90d866ff9636e5a04768825d05d27b3fb19ec) Curve pool; and 2. Replace the existing `ChainlinkCurve2CoinsFeed` with a new `DynamicFeeCurveFeed` that explicitly accounts for the Curve pool’s trading fee. The goal is for FiRM and Frontier to use a price that reflects INV’s net-of-fee executable value in our main liquidity pool. ## Background * INV is currently priced via a Chainlink \+ Curve oracle: * Chainlink WETH/USD price, combined with * Curve INV/WETH twocrypto-ng EMA (`price_oracle()`). * The DAO is migrating INV liquidity and routing to a new INV/WETH Curve pool configured with a higher trading fee. * With the higher fee, the mid-price from the pool (EMA) overstates the value a liquidator can actually realize after paying fees. To keep the oracle aligned with where INV trades and make pricing slightly more conservative, we introduce a dynamic-fee-aware variant. ## DynamicFeeCurveFeed Overview The new oracle contract, `DynamicFeeCurveFeed`, keeps the same basic structure: * Uses `IChainlinkBasePriceFeed` for WETH → USD (18 decimals). * Uses the new INV/WETH Curve pool for: * `price_oracle()` (EMA of the INV/WETH rate), and * `fee()` (dynamic pool fee, 1e10 precision). * Returns INV/USD with 18 decimals and description INV / USD. Price calculation (simplified): * Get `pairedTokenToUsdPrice` (WETH/USD) from Chainlink. * Get `crvOraclePrice` from `curvePool.price_oracle()`, which is WETH/INV * Compute INV/USD * Fetch `fee = curvePool.fee()`, clamp it to `maxFee` (initially 2%, equal to the pools maximum fee). * Apply the discount: `usdPrice = usdPrice * (1 - fee)`. This makes the oracle reflect a post-fee price, bounded by a governance-controlled maxFee (0–100%). The contract also includes a simple gov / pendingGov pattern and a setMaxFee(int \_maxFee) function restricted to gov. ## Rationale * We are already relying on the INV/WETH Curve pool as the main liquidity venue for INV. * With the new pool’s higher fee, using a pure mid-price (price\_oracle()) overestimates the value available to liquidators and arbitrageurs. * Applying the Curve fee in the oracle: * Keeps assumptions closer to real execution, and * Introduces a small, bounded conservative bias that improves risk management for FiRM and Frontier. ## On-Chain Actions * Update FiRM INV Feed * Update Frontier INV Feed * Update sINV price feed
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# Deprecate the FiRM Fed Global Ceiling # Proposal to Deprecate the FiRM Fed Global Ceiling Forum Post: https://forum.inverse.finance/t/deprecate-the-firm-fed-global-ceiling/623 ## TL;DR * What: Raise the FiRM Fed’s global supply ceiling to a practically non-binding level so it no longer constrains operations. * Why: The global ceiling adds little risk control beyond per-market ceilings, but it does create operational friction (hard caps on idle liquidity). ## Background The [FiRM Fed](https://etherscan.io/address/0x2b34548b865ad66a2b046cb82e59ee43f75b90fd#code) mints/burns DOLA into approved FiRM markets. In `expansion()`, two checks gate supply: * Global: `globalSupply + amount <= supplyCeiling` * Per-market: `supplies[market] + amount <= ceilings[market]` Other relevant guardrails: * Only the chair can call expansion/contraction; only gov can change ceilings/chair. * Expansion is blocked if a market is paused (`borrowPaused()` check). * Only whitelisted markets (`dbr.markets(address(market))`) can be targeted. Note: Raising the global ceiling does not mint DOLA. It only relaxes the aggregate cap. All per-market ceilings remain fully binding. ## Motivation The global ceiling has become an operational constraint without adding material risk control: * It prevents leaving healthy idle DOLA in lower-utilization markets (e.g., ETH-collateral markets) even when per-market ceilings are conservative. That can deter new borrowers who want to see available liquidity before opening positions. * Risk is already budgeted at the market level via `ceilings[market]`. Those limits are what actually shape exposure and are the knobs we tune as collateral, liquidity, and oracle conditions evolve. * The global ceiling introduces a “sum of all markets” choke point that we repeatedly trip on, not for risk reasons (e.g., juggling liquidity between markets). By setting the global ceiling to a very high value, we effectively deprecate it while keeping all per-market ceilings and existing checks intact. This high value is proposed to be 100 billion DOLA. ## What Changes vs. What Stays the Same * Stays: Per-market ceilings (primary risk limit), borrow-pause check, chair-only control, and ability to contract supply at any time. * Changes: The global ceiling no longer binds day-to-day operations; the Fed Chair can pre-fund markets up to their individual ceilings without tripping an aggregate cap. ## On-Chain Action * Set FiRM Fed’s global ceiling to 100,000,000,000 DOLA
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# Re-allocate the FiRM Market Ceilings for USR LP Markets # Proposal to Re-allocate the FiRM Market Ceilings for USR LPs Forum Post: https://forum.inverse.finance/t/re-allocate-the-firm-market-ceilings-for-usr-lp-markets/620 ## Summary Rebalance the existing $50 million FiRM debt ceiling for the USR-backed LPs by shifting capacity full from DOLA/USR to DOLA/wstUSR. | Variant | Current Ceiling | Proposed Ceiling | Change | | :---- | :---- | :---- | :---- | | yv-DOLA/USR | $5m | 0 | \-$5m | | DOLA/USR | $20m | 0 | \-$20m | | yv-DOLA/wstUSR | $5m | $10m | \+$5m | | DOLA/wstUSR | $20m | $40m | \+$20m | | Total | $50m | $50m | 0 | The overall risk exposure stays constant; only its distribution changes. ## Background * **Collateral listing**: DOLA/USR LP ([Convex](https://www.inverse.finance/governance/proposals/mills/274) & [Yearn](https://www.inverse.finance/governance/proposals/mills/275)) was enabled in March 2025; DOLA/wstUSR ([Convex](https://www.inverse.finance/governance/proposals/mills/321) & [Yearn](https://www.inverse.finance/governance/proposals/mills/320)) was enabled in October 2025 * **Performance**: the USR-backed market has consistently been the top-performing (or one of the top-performing) markets on FiRM ## Motivation * **Better Performance:** The wstUSR variant LP has performed better, despite a lower RESOLV point multiplier (20x compared with 30x on DOLA/USR) * **Long-term sustainability**: Switching to the yield-bearing variant is more sustainable in the long run because the yield will always be available, whereas the value of point incentives is likely to decrease over time. * **Unchanged risk profile**: Total debt, LTV parameters, and oracle sources remain exactly as already approved. ## On-Chain Actions * Set the market ceiling of Yearn DOLA/USR FiRM Market to 0 DOLA * Set the market ceiling of Convex DOLA/USR FiRM Market to 0 DOLA * Set the market ceiling of Yearn DOLA/wstUSR FiRM Market to 10m DOLA * Set the market ceiling of Convex DOLA/wstUSR FiRM Market to 40m DOLA
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# Re-allocate the FiRM Market Ceilings for DOLA/sUSDe LP # Proposal to Re-allocate the FiRM Market Ceilings for DOLA/sUSDe LP Forum Post: https://forum.inverse.finance/t/re-allocate-the-firm-market-ceilings-for-dola-susde-lp/612 ## Summary Rebalance the existing $100 million FiRM debt ceiling for the DOLA / sUSDe collateral by shifting capacity from the Yearn vault to the Convex vault: | Variant | Current Ceiling | Proposed Ceiling | Change | | :---- | :---- | :---- | :---- | | Yearn | $50m | $20m | \-$30m | | Convex | $50m | $80m | \+$30m | | Total | $100m | $100m | 0 | The overall risk exposure stays constant; only its distribution changes. ## Background * **Collateral listing**: DOLA/sUSDe LP ([Convex](https://www.inverse.finance/governance/proposals/mills/241) & [Yearn](https://www.inverse.finance/governance/proposals/mills/240)) was enabled in November 2024\. * **Ceiling increase**: In December 2024 the [DAO raised each vault’s ceiling](https://www.inverse.finance/governance/proposals/mills/253) from $10m to $50m (total $100m). * **Performance**: the DOLA/sUSDe market has consistently been the top-performing (or one of the top-performing) markets on FiRM * **Ethena Sats**: on 22nd October 2025, the Ethena points multiplier to LPs on FiRM was doubled from 15x to 30x, making it far more attractive for users ## Motivation * **Ethena Partnership Milestone**: The Ethena points multiplier for DOLA/sUSDe LPs on FiRM has recently doubled from 15× → 30×, making FiRM’s markets one of the highest-yielding Ethena partner opportunities currently available. This upgrade highlights the strength of Inverse’s collaboration with Ethena and cements DOLA/sUSDe LPs as one of the most attractive points-earning venues in the ecosystem, given the ability to lever it. * **Utilization Disparity:** Despite equal 50M ceilings, the Convex LP is near full utilization (\~40M borrowed) while the Yearn LP remains lightly used (\~10M). Without reallocation, new inflows risk being blocked despite strong borrower demand. * **Unchanged risk profile**: Total debt, LTV parameters, and oracle sources remain exactly as already approved. ## On-Chain Actions * Set the market ceiling of Yearn DOLA/sUSDe FiRM Market to 20m DOLA * Set the market ceiling of Convex DOLA/sUSDe FiRM Market to 80m DOLA
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addMarket(address)# Add DOLA/wstUSR Yearn LP Market to FiRM Forum Link: https://forum.inverse.finance/t/add-dola-wstusr-yearn-lp-market-to-firm/607 ## Summary This proposal adds the DOLA/wstUSR Curve LP token (LPT) as a collateral option on FiRM. The new market mirrors the risk framework of the [existing DOLA/USR LP markets](https://forum.inverse.finance/t/proposal-to-add-dola-usr-convex-lp-market-to-firm/546) while directing part of aggregate exposure to the yield-bearing wstUSR leg. To keep total USR-related exposure unchanged, we propose reducing the aggregate DOLA/USR LP ceilings to $25m and setting the DOLA/wstUSR LP ceiling to $25m, preserving a combined $50m limit across USR-family LPs as previously approved and expanded by governance. Why now: the DOLA/wstUSR LP accrues the staking yield from stUSR via wstUSR, which should be structurally more sustainable for the DAO versus points-only flows. While the current Resolv incentives award a lower multiplier to DOLA/wstUSR versus DOLA/USR (e.g., 20× vs. 30×), the embedded stUSR yield helps offset that difference over time. ## Background * The DAO previously approved the DOLA/USR Convex LP market on FiRM and later raised its ceilings (Convex + Yearn variants) with an aggregate cap of $50m * This proposal keeps the same overall USR-related exposure while introducing the yield-bearing wstUSR variant as an alternative collateral market ## Motivation * Sustainability: wstUSR wraps stUSR, which accrues protocol yield; LPing DOLA against wstUSR lets borrowers capture that yield path while borrowing fixed-rate DOLA on FiRM. * No net risk expansion: we reallocate ceilings from DOLA/USR to DOLA/wstUSR 1:1 (see “Ceilings & Reallocation”) instead of increasing aggregate exposure. ## Ceilings & Reallocation This proposal will uphold the [previously authorized $50 million total cap](https://forum.inverse.finance/t/raise-dola-usr-lp-firm-market-ceilings/589) across USR-family LPs. The current DOLA/USR LP limits will be scaled down proportionally from the existing split (Convex $40 million, Yearn $10 million) to convex $20 million and Yearn $5 million. The new DOLA/wstUSR LP limits will mirror this, with convex receiving $20 million and Yearn receiving $5 million. ### Risk & Oracle (unchanged approach) * Collateral profile: Stable-to-stable Curve LP with DOLA and wstUSR; wstUSR unwraps to stUSR, accruing yield against USR units. * Oracle methodology: Mirror the approved DOLA/USR LP oracle approach using a conservative LP valuation (Curve virtual price and Chainlink USR/USD price feed) via the deployed custom token price feed adapter used for USR-family LPs. * Liquidations: Same liquidation factor/incentive and settlement paths as DOLA/USR LP markets. * Governance & operational considerations: This does not add a new issuer exposure beyond USR/stUSR; it redistributes ceilings toward the yield-bearing wrapper. Prior USR collateral risk assessment and monitoring continue to apply. ## Parameters (match DOLA/USR LP settings) We propose to inherit the existing DOLA/USR LP market parameters, which have already been vetted by governance: * Collateral Factor (CF): 90% * Liquidation Factor (LF): 100% * Liquidation Incentive (LI): 5% *Daily Borrow Limit (BorrowController): 2,000,000 DOLA * Minimum Debt: 3,000 DOLA * Oracle stalenessThreshold: 86,460 (≈ 24h) These values match the approved template previously used for the DOLA/USR Convex LP market. [(Inverse Finance Forum)](https://forum.inverse.finance/t/proposal-to-add-dola-usr-convex-lp-market-to-firm/546) ## On-Chain Actions * Add DOLA/wstUSR LP Yearn Market to DBR Contract * Set borrowController of Market to FiRM BorrowController * Set Market Supply Ceiling to 5,000,000 DOLA * Set Daily Limit in BorrowController to 2,000,000 DOLA * Set Collateral Factor to 90% * Set Liquidation Factor to 100% * Set Liquidation Incentive to 5% * Approve DOLA/wstUSR LP Yearn Market on the DBR Helper * Set Minimum Debt Amount in BorrowController to 3,000 DOLA * Set stalenessThreshold for DOLA/wstUSR Convex LP market to 86460 (24 hours) * Set FiRM Oracle Price Feed for DOLA/wstUSR Convex LP to the deployed custom tokenPriceFeed contract * Add DOLA/wstUSR LP Convex Market to ALE * Add DOLA/wstUSR LP Convex Market to CurveDolaLPHelper * Reduce DOLA/USR LP Yearn market ceiling to 5,000,000
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# Onboard PT-sUSDe-27NOV25 Market to FiRM # Add PT-sUSDe-27NOV25 Market to FiRM Forum Post: https://forum.inverse.finance/t/onboard-pt-susde-27nov25-to-firm/600 ## Summary This proposal seeks to integrate the PT-sUSDe-27NOV25 token from Pendle as a collateral asset on FiRM, Inverse Finance’s fixed-rate lending protocol. Like other onboarded PT markets, this is a Principal Token representing the right to receive 1 USDe upon maturity, which will occur on November 27, 2025. ## Background Pendle Finance is a yield-trading platform that tokenizes yield-bearing assets into two components: - **Principal Tokens (PTs):** redeemable for the underlying asset at maturity; - **Yield Tokens (YTs):** which accrue the asset’s yield until expiry. ## Price Feed Similar to the previously onboarded Pendle PT markets, we intend to use a discount to NAV price feed. This feed accounts for the zero-coupon nature of the PT by applying a fixed discount rate to par value that exponentially converges to $1 as maturity nears. Only two main parameters, discount rate and time (block #) of maturity, must be configured. Importantly, by setting a conservative discount rate, the protocol intentionally underprices the PT relative to potential market optimism, which is safer from a protocol risk perspective. ## Business Case Pendle PT markets for USDe and sUSDe have proven a massive success on FiRM, since it allows users to lock in a fixed yield against a fixed borrow rate. This success has been demonstrated with over $20m in debt between the USDe and sUSDe September PT markets currently. Onboarding the November PT allows users to roll over to the later maturity if they wish, seamlessly. ## Parameters Please see RWG parameter recommendations [here](https://forum.inverse.finance/t/onboard-pt-susde-27nov25-to-firm/600/2), which have been accepted for this proposal.
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# 4 - Increase Max Rate on Virtual xy=k DBR Auction # Increase Max Rate of Virtual xy=k DBR Auction Forum Post: https://forum.inverse.finance/t/4-increase-max-rate-on-virtual-xy-k-dbr-auction/598 ## Summary Raise the virtual xy=k DBR auction ceiling (`maxDbrRatePerYear`) from 100,000,000 to 200,000,000 DBR/year. This gives the Fed Chair additional headroom to match FiRM’s rapidly growing debt while remaining within the DAO’s existing issuance policy and guardrails. ## Background - The virtual xy=k auction continuously sells fresh DBR for DOLA, with proceeds routed via the current [SaleHandler](https://forum.inverse.finance/t/set-new-salehandler-for-use-by-the-virtual-xy-k-dbr-auction/530) (bad-debt repayment + flexible treasury use per governance settings). - Since launch in January 2024, the DAO has progressively expanded the auction’s cap as FiRM scaled (5m → 20m → 50m → 100m DBR/year). - By late June 2025, FiRM debt had reached record highs, and the auction ceiling was increased to **100m** to prevent issuance bottlenecks; the current DBR policy was also outlined in [that proposal](https://forum.inverse.finance/t/3-increase-max-rate-on-virtual-xy-k-dbr-auction/577). ## Rationale **FiRM debt growth needs more room.** Debt on FiRM has expanded sharply since late 2024, and the auction has frequently operated near its ceiling, constraining how quickly issuance can respond to demand. Doubling the ceiling to 200m DBR/year preserves responsiveness as debt and daily DBR burn continue to set new highs. **Safety is unchanged.** Since March 2025, the dynamic-inventory issuance policy has kept DBR inventory in a healthy band (~30–50 days; recently inventory has fallen with debt growth that has not been able to be matched with issuance given the 100m cap). The policy automatically tapers issuance if inventory rises—meaning more headroom does **not** force issuance; it only removes an artificial cap when conditions warrant. Operator discretion (Fed Chair) remains intact. **Treasury alignment.** With the updated SaleHandler, auction proceeds can still satisfy a governance-set minimum for automated bad-debt repayment, with flexibility for liquidity incentives or treasury funding as previously approved; scaling the cap remains aligned with peg stability and revenue goals. ## What Changes (and What Doesn’t) - **Changes:** `maxDbrRatePerYear` increases to 200,000,000. - **No change:** Virtual reserves/curve parameters, SaleHandler settings, INV staking streams, sDOLA auction, or the dynamic-inventory issuance policy. The Fed Chair continues to set the live rate anywhere from 0 up to the new max per policy. ## Risks & Mitigations - **Over-issuance risk:** Mitigated by the dynamic-inventory policy (automatic taper) and operator discretion; the higher ceiling only adds headroom. - **Market impact on DBR:** The auction’s pricing and arbitrage behavior remain unchanged; issuance still scales with peg/inventory signals rather than the cap itself. ## On-Chain Action - Set `maxDbrRatePerYear` to 200,000,000 (DBR/year).
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# Onboard PT-USDe-25SEP25 Market to FiRM # Add PT-USDe-25SEP25 Market to FiRM Forum Post: https://forum.inverse.finance/t/onboard-pt-usde-25sep25/595 ## Summary This proposal seeks to integrate the **PT-USDe-24SEP25** token from Pendle as a collateral asset on FiRM, Inverse Finance’s fixed-rate lending protocol. Like the PT-sUSDe markets, this is a Principal Token representing the right to receive **1 USDe** upon maturity—this time on **September 25, 2025**. ## Background Pendle Finance is a yield-trading platform that tokenizes yield-bearing assets into two components: - **Principal Tokens (PTs)**: redeemable for the underlying asset at maturity. - **Yield Tokens (YTs)**: accrue the asset’s yield until expiry. ## Price Feed Similarly to the previously onboarded PT-sUSDe markets, we intend to use a **discount to NAV price feed**. This feed accounts for the zero-coupon nature of the PT by applying a fixed discount rate to par value that exponentially converges to $1 as maturity nears. Only two main parameters—discount rate and time (block #) of maturity—must be configured. Importantly, by setting a conservative discount rate, the protocol intentionally underprices the PT relative to potential market optimism, which is safer from a protocol risk perspective. ## Business Case Multiple users, as well as the Ethena team, have requested the PT-USDe market for integration on FiRM. The fixed yield has been very high, near **15%**, given the robust market demand for buying the YTs. With current FiRM rates, this presents a very attractive opportunity for users to leverage a high fixed yield spread on FiRM. ## Market Parameters Given that the risk profile of the market is very similar to the previously onboarded PT-sUSDe-24SEP25 market, **identical risk parameters** are being proposed for this market. | Parameter | Recommended Value | |----------------------|---------------------------| | Supply Ceiling | 50,000,000 DOLA | | Daily Borrow Limit | 2,000,000 DOLA | | Collateral Factor | 91.5% | | Liquidation Factor | 100% | | Liquidation Incentive| 5% | | Minimum Debt Amount | 3,000 DOLA | | Oracle | Discount to NAV, r = 22% |
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# 2 - Extend DOLA Payroll Allowance # Extend the DOLA Payroll Allowance Forum Post: https://forum.inverse.finance/t/2-extend-dola-payroll-allowance/590 ## Summary Authorize an additional 296,000 DOLA allowance for the contributor-payroll contract so that all active contributors can continue to receive compensation for the next 60 days while the DAO restructuring is finalized. This follows on from the previous 30-day extension [approved 1 month ago](https://www.inverse.finance/governance/proposals/mills/301). ## Context and Problem * Seasonal payroll model – The DAO traditionally funds contributor payments in fixed “seasons” (e.g., S3 → S4). * Pause directive – At Nour’s request, working-group heads paused the transition to Season 4 pending a broader restructuring plan. * Result – The dedicated DOLA allowance on the payroll contract has now depleted, halting payouts entirely. Contributors deliver ongoing work that underpins core protocol operations, risk management, and development. It is crucial to continue compensation as it otherwise risks talent loss and operational disruption. ## Extension Calculation * Unclaimed payroll (expected at time of proposal execution) = 55,000 DOLA * Monthly Payroll = 120,500 * Allowance required = 120,500*2 + 55,000 = 296,000 DOLA ## On-Chain Actions * Set DOLA allowance of the payroll contract to 296,000 DOLA
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# Raise DOLA/USR LP FiRM Market Ceilings # Proposal to Raise DOLA/USR LP FiRM Market Ceilings Forum Post: https://forum.inverse.finance/t/raise-dola-usr-lp-firm-market-ceilings/589 ## Summary This proposal seeks to raise the aggregate debt ceiling for the DOLA/USR LP collateral on FiRM from $40 million to $50 million, distributed as follows: |Variant|Current Ceiling|Proposed Ceiling|Change| | --- | --- | --- | --- | |Convex|$35m|$40m|+$5m| |Yearn|$5m|$10m|+$5m| |Total|$40m|$50m|+10m| The increase reflects continued demand from FiRM borrowers and LP participants, while maintaining all other risk parameters and preserving the existing risk architecture. ## Background The DOLA/USR LP collateral markets — spanning both Convex- and Yearn-aligned variants — were introduced to FiRM in March 2025. A ceiling expansion from $20M to $40M was executed in April, and a reallocation between the two variants was approved in May to better match user preference and liquidity incentives. FiRM’s DOLA/USR markets have since become a top-performing pair in terms of revenue efficiency and user demand. LP activity remains elevated due to ongoing incentives, and both vaults are operating with high utilization. Expanding the ceilings will allow FiRM to accommodate organic borrower demand while continuing to grow protocol revenue. ## Motivation * User demand: [Resolv Points Season 2](https://resolv.xyz/blog/resolv-points-season-2-the-future-is-resolv) has driven a surge in LP activity; FiRM power users have indicated the desire to scale in further to the position. * Revenue Capture: FiRM benefits from continued DOLA demand while taking on no new collateral type or technical risk. ## On-Chain Actions * Set the market ceiling of Convex DOLA/USR FiRM Market to 40,000,000 DOLA * Set the market ceiling of Yearn DOLA/USR FiRM Market to 10,000,000 DOLA
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# Onboard PT-sUSDe-24SEP25 Market to FiRM # Add PT-sUSDe-24SEP25 Market to FiRM Forum Post: https://forum.inverse.finance/t/onboard-pt-susde-24sep25/576 ## Summary This proposal seeks to integrate the PT-sUSDe-24SEP25 token from Pendle as a collateral asset on FiRM, Inverse Finance’s fixed-rate lending protocol. Like its predecessor (the successfully onboarded PT-sUSDe-31JUL25), PT-sUSDe-24SEP25 is a Principal Token representing the right to receive 1 USDe upon maturity—this time on September 24, 2025. ## Background Pendle Finance is a yield-trading platform that tokenizes yield-bearing assets into two components: * Principal Tokens (PTs), redeemable for the underlying asset at maturity; * Yield Tokens (YTs), which accrue the asset’s yield until expiry. After a successful integration of PT-sUSDe-27MAR2025 on FiRM in late 2024, demand for PT-based strategies has proven to be strong. This new PT, PT-sUSDe-24SEP25, extends the maturity date and aims to offer continued opportunities for fixed-income and carry-trade strategies, leveraging FiRM’s fixed-rate borrowing. ## Price Feed Similarly to the previously onboarded PT-sUSDe-31JUL25 market, we intend to use a discount to NAV price feed. This feed accounts for the zero-coupon nature of the PT by applying a fixed discount rate to par value that exponentially converges to $1 as maturity nears. Only two main parameters—discount rate and time (block #) of maturity—must be configured. Importantly, by setting a conservative discount rate, the protocol intentionally underprices the PT relative to potential market optimism, which is safer from a protocol risk perspective. ## Business Case The 31 July PT demonstrated strong initial borrower interest. FiRM was on track to originate eight-figure debt volumes, only to see that momentum diverted when Aave pre-emptively raised its caps from $800 million to $1.3 billion. By the time our July market cleared governance, prospective borrowers had already migrated their positions to Aave’s more attractive rate environment. With the PT-sUSDe-24SEP25, we have a clear window to regain first-mover advantage: * **Early Listing**: Propose and onboard the September PT before competing platforms such as AAVE finalize their cap increases, locking in early movers at compelling rates. * **Seamless Rollover**: Offering a continuous pathway from the 31 July PT into the September PT reassures potential borrowers on the July PT of uninterrupted exposure, reducing churn and building protocol stickiness. With rates on competitors such as AAVE and Morpho raising, it could soon be very attractive for users to migrate to FiRM to lock in cheaper rates. * **Debt Growth**: Early origination not only recaptures deferred volume from July’s market but also secures incremental debt against a high-demand tenor. Therefore, onboarding the September PT ahead of peers is critical to reasserting FiRM’s position in the fixed-term lending landscape, maximizing debt supply, and strengthening borrower confidence in rollover availability. ## Risk Assessment Please see the Risk Assessment carried out by the RWG for [PT-sUSDe-24SEP25 Collateral on FiRM here](https://forum.inverse.finance/t/onboard-pt-susde-24sep25/576/2). With the following parameter recommendation: |Parameter|Recommended Value| | --- | --- | |Supply Ceiling|50,000,000 DOLA| |Daily Borrow Limit|2,000,000 DOLA| |Collateral Factor|91.5%| |Liquidation Factor|100%| |Liquidation Incentive|5%| |Minimum Debt Amount|3,000 DOLA| |Oracle|Discount to NAV, r = 22%| These parameters are accepted and will be pushed forward in this proposal.
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# Increase Max Rate on Virtual xy=k DBR Auction # Increase Max Rate of Virtual xy=k DBR Auction Forum Post: https://forum.inverse.finance/t/3-increase-max-rate-on-virtual-xy-k-dbr-auction/577 ## Summary This proposal increases the annual issuance cap that the Fed Chair can set for the virtual xy = k DBR auction from 50 million to 100 million DBR. The higher ceiling allows issuance to scale with FiRM’s record-high debt, while DBR’s current issuance policy ensures supply growth remains self-correcting and safe. ### Quick primer — how DBR issuance works |Channel|What it does| | --- | --- | |Virtual xy = k auction|Continuously sells fresh DBR for DOLA; DOLA pays down bad debt & funds incentives| |Streaming to INV stakers|Distributes DBR as staking yield| |sDOLA auction|Continuosly sells DBR to provide sustainable yield to DOLA stakers| Why issuance matters: Borrowers must burn ≈ 1 DBR per 1 DOLA debt per year. Too little issuance and debt growth stalls; too much and borrowers hoard cheap DBR, weakening the peg incentives. ### How issuance was handled before March 2025 (“peg-only” rule) We target a skew of DOLA in DOLA liquidity pools, which is dictated by DOLAs peg (with the lower the peg, the higher its skew). Logic * If DOLA skew > target skew ➜ protocol issued more DBR than was burnt that day * If DOLA skew < target skew ➜ protocol issued less DBR than burnt * No reference to how much DBR was already sitting in wallets (the “inventory”). Outcome * A long stretch of strong peg (so skew > target skew) in mid-2024 meant net issuance for months → inventory ballooned to > 400 days of coverage. * Cheap DBR removed urgency to buy in the auction → debt growth actually slowed despite higher ceilings. ### The March 2025 fix — dynamic-inventory policy |Step|What it does|Issuance decision| | --- | --- | --- | |1|Inventory < target (≈ 30–50 days)|Follow peg rule (growth OK)| |2|Inventory ≈ target|Issue min(burn, peg-rule)| |3|Inventory > target|Linearly taper issuance from burn → 0 across a 60-day buffer| Results four months in: ![|624x372](https://lh7-rt.googleusercontent.com/docsz/AD_4nXcg1fm0QtJLtSkX2XjGRsAGr-CYPAA3FquFR_FKf5i9ZFu5UBVkpHp-kdpcpyS2QeGIvkjFdQJY0toQ0_lzR4hyqQdq_Iq5TgQgv3Y-wc0dxFeDLTQNMjrcX5mD9UtMkFkZel1c?key=Lr7yJV5E_wOdfd_crInczA) * Inventory collapsed from ≈ 400 days → ≈ 40 days, while FiRM debt quintupled. * Auctions stayed active, DBR price remained firm, and no manual “emergency” stops were needed. ### Rationale for Doubling the Auction Ceiling FiRM’s debt load has expanded from roughly $15 million in November 2024 to more than $80 million today—a five-fold increase. Yet the virtual auction is still constrained by the original 50 million-DBR-per-year cap set when debt was a fraction of its current size. As a result, the auction is operating near its limit most days; any further growth in debt will push the system up against a hard ceiling that throttles new issuance even when market conditions call for it. At the same time, the March 2025 dynamic-inventory policy has eliminated the over-issuance risk that characterised 2024. Inventory (measured in “days of DBR coverage”) has fallen from the dangerous 400-day peak to a healthy 30--50-day band, and it has stayed there for four months despite record debt expansion. The policy’s built-in taper ensures that if debt growth slows—or if DBR begins to cheapen excessively—issuance automatically scales back toward zero well before inventory can bloat again. In short, the control system is doing its job: more issuance only flows when the peg is strong and inventory is below target. Given those two facts, debt five times larger, and a proven self-correcting issuance rule, it is both necessary and safe to raise the ceiling. The change is entirely parametric: the Fed Chair still adjusts the dial in real-time, but now has up to 100 million DBR per year of headroom, instead of 50 million. All other issuance channels (INV staking streams, sDOLA auctions) and all existing safeguard logic remain untouched. By approving a new 100 million DBR-per-year ceiling, the DAO equips FiRM to keep pace with its own growth, continue funding incentives and bad-debt reduction, and do so without compromising peg stability or over-issuance discipline. ## On-Chain Action * Set maxDbrRatePerYear to 100m
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setBorrowController(address)# Update the FiRM Borrow Controller To Linear Borrow Limit Replenishments [1/2] # Update the FiRM Borrow Controller Forum Post: https://forum.inverse.finance/t/update-the-firm-borrow-controller/572 ## Summary This proposal aims to update the borrow controller for all active markets on FiRM to implement an improved method of handling the daily borrow limit. The changes will introduce a rolling 24-hour limit, replacing the current system, which resets the borrow limit at midnight (00:00 UTC). ## Background The borrow controller in FiRM serves as a gatekeeper for borrowing transactions, determining if users are permitted to borrow based on the following criteria: * **Market Daily Borrow Limit**: Verifies that the requested borrow amount does not exceed the remaining daily borrow limit for the market. * **Smart Contract Verification**: Checks whether the borrowing address is a smart contract and, if so, ensures it is on the whitelist. The daily borrow limit is a key risk management feature designed to: * Mitigate potential DAO losses in the event of an exploit * Limit the financial gain for would-be exploiters Currently, the daily borrow limit resets entirely at midnight (00:00 UTC), leading to the following drawbacks: * **Double Borrowing Exploitability**: A borrower can execute a transaction just before midnight and another immediately after, effectively doubling the daily limit in a short period. * **Non-Linear Competition**: In competitive markets like DOLA/USR, borrowers who act first after midnight can consume the entire limit, leaving no capacity for others. To address these issues, we propose shifting to a rolling 24-hour borrow limit. This updated mechanism will replenish borrowing capacity incrementally with each passing second, rather than resetting at a fixed time. ## Implementation The rolling-limit borrow controller we are reinstating has already proved itself in production: it was first rolled out by [Grace Protocol](https://github.com/GraceProtocol/grace-protocol/blob/5083e630d60d0ea6b9a28c139d2babb77bcce506/src/BorrowController.sol#L51) and later activated on a group of [pilot markets within FiRM](https://www.inverse.finance/governance/proposals/mills/249), where it underwent rigorous live testing. During the subsequent [Pectra-compliant controller upgrade](https://forum.inverse.finance/t/update-to-pectra-compliant-firm-borrow-controller/547), that rolling-limit module was inadvertently removed from those markets. This proposal simply restores the same, fully validated logic—while keeping every other feature of the current controller—and extends it to every active FiRM market. The code has passed exhaustive internal testing as well as an independent external review, giving the DAO high confidence in its reliability and security. ## Onchain Actions: * Set operator of new BorrowController to the BorrowControllerMigrationHelper * Add new BorrowController as DBR minter * Add new BorrowController as borrowController for half of FiRM markets (limited by governor action limit) * Migrate allowlisted addresses from old BorrowController to new BorrowController * Migrate market staleness, mindebt and debtlimit parameters from old BorrowController to new BorrowController * Set operator of new BorrowController to governance
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# Add PT-sUSDe-31JUL25 Market to FiRM # Add PT-sUSDe-31JUL25 Market to FiRM Forum Post: https://forum.inverse.finance/t/add-pt-susde-31jul25-market-to-firm/573 ## Summary This proposal seeks to integrate the PT-sUSDe-31JUL25 token from Pendle as a collateral asset on FiRM, Inverse Finance’s fixed-rate lending protocol. Like its predecessor (the successfully onboarded PT-sUSDe-29MAY2025), PT-sUSDe-31JUL25 is a Principal Token representing the right to receive 1 USDe upon maturity—this time on July 31, 2025. ## Background Pendle Finance is a yield-trading platform that tokenizes yield-bearing assets into two components: * Principal Tokens (PTs), redeemable for the underlying asset at maturity; * Yield Tokens (YTs), which accrue the asset’s yield until expiry. After a successful integration of PT-sUSDe-27MAR2025 on FiRM in late 2024, demand for PT-based strategies has proven to be strong. This new PT, PT-sUSDe-29MAY2025, extends the maturity date and aims to offer continued opportunities for fixed-income and carry-trade strategies, leveraging FiRM’s fixed-rate borrowing. ## Price Feed Similarly to the previously onboarded PT-sUSDe-29MAY2025 market, we intend to use a discount to NAV price feed. This feed accounts for the zero-coupon nature of the PT by applying a fixed discount rate to par value that exponentially converges to $1 as maturity nears. Only two main parameters—discount rate and time (block #) of maturity—must be configured. Importantly, by setting a conservative discount rate, the protocol intentionally underprices the PT relative to potential market optimism, which is safer from a protocol risk perspective. ## Business Case The 31st July sUSDe Pendle market has proven very popular on over lending markets, given its YT represents the last opportunity to earn 30x Ethena points, with the preceding 25th September sUSDe market providing 25x Ethena points. Over 43m PT-sUSDE-31JUL2025 tokens are used as collateral on Morpho, and 800m on Aave v3, demonstrating extremely strong market demand. Temple DAO, a top FiRM debt holder and INV holder, holds a sizable PT-sUSDe-31JUL2025 position on Morpho and has indicated a desire to move some of this position to FiRM to benefit from the reliability of fixed rates. This represents a clear demand driver to scale FiRM's debt and revenue to new highs. ## Risk Assessment and Parameter Recommendation Please see the Risk Assessment carried out by the RWG for [PT-sUSDe-31JUL25 Collateral on FiRM here](https://docs.google.com/document/d/11zLDGM7x41j0XT8muL9VYxUaHQiDZ0K7TBVzxR0E9YM/edit?usp=sharing). With the following parameter recommendation: |Parameter|Recommended Value| | --- | --- | |Supply Ceiling|50,000,000 DOLA| |Daily Borrow Limit|5,000,000 DOLA| |Collateral Factor|91.5%| |Liquidation Factor|100%| |Liquidation Incentive|5%| |Minimum Debt Amount|3,000 DOLA| |Oracle|Discount to NAV, r = 20%| These parameters are accepted and will be pushed forward in this proposal.
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# Re-allocate the FiRM Market Ceilings for DOLA/USR LP # Proposal to Re-allocate the FiRM Market Ceilings for DOLA/USR LP Forum Post: https://forum.inverse.finance/t/re-allocate-the-firm-market-ceilings-for-dola-usr-lp/569 ### Summary Rebalance the existing $40 million FiRM debt ceiling for the DOLA / USR collateral by shifting capacity from the Yearn vault to the Convex vault: |Variant|Current Ceiling|Proposed Ceiling|Change| | --- | --- | --- | --- | |Yearn|$20m|$5m|-$15m| |Convex|$20m|$35m|+$15m| |Total|$40m|$40m|0| The overall risk exposure stays constant; only its distribution changes. ### Background * Collateral listing: DOLA/USR LP ([Convex](https://www.inverse.finance/governance/proposals/mills/274) & [Yearn](https://www.inverse.finance/governance/proposals/mills/275)) was enabled in March 2025. * Ceiling increase: On 6 April 2025 the [DAO raised each vault’s ceiling](https://www.inverse.finance/governance/proposals/mills/282) from $10m to $20m (total $40m). * Performance: As of 12 May 2025, DOLA/USR is FiRM’s most profitable collateral, delivering a 1.44× bribe-to-revenue multiplier. ### Motivation * User demand: [Resolv Points Season 2](https://resolv.xyz/blog/resolv-points-season-2-the-future-is-resolv) has driven a surge in LP activity; FiRM power users have indicated the desire to scale in further to the position, specifically on the Convex vault. * Capital efficiency: Redirecting headroom to the preferred venue lets FiRM capture incremental revenue without lifting the aggregate cap. * Unchanged risk profile: Total debt, LTV parameters, and oracle sources remain exactly as already approved. ### On-Chain Actions * Set the market ceiling of Yearn DOLA/USR FiRM Market to 5m DOLA * Set the market ceiling of Convex DOLA/USR FiRM Market to 15m DOLA
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setMarket(address,address,address,bool)setMarket(address,address,address,bool)# [2/3] Deploy ALE V3 with Aggregator Support Forum Link: https://forum.inverse.finance/t/deploy-ale-v2-with-aggregator-support/559 ## Summary This proposal seeks to deploy ALE V2 to replace and enhance the existing ALE on FiRM. ALE V2 consolidates our leverage logic into a single, robust contract, supporting both 1inch and Odos aggregators for more efficient and flexible routing. In addition, ALE V2 integrates Pendle PT collateral functionality, simplifying complex leverage actions and enabling users to easily leverage into- and deleverage from yield strategies with PT and YT tokens. ## Background The original ALE was designed to facilitate looping and leveraging for FiRM markets but had limitations in flexibility and required repeated redeployments for new collateral types. Additionally, previous helper contracts required fragmented logic for handling different collateral compositions, resulting in technical debt and deployment friction. ALE V2 represents a major architectural improvement, merging the previous ALE and undeployed ALEPendle implementations into one contract and updating all associated helpers to a unified interface. The engine now directly supports: * Pendle PT markets, with helper-based mint/redeem handling for PT and YT tokens. * Aggregator-based swaps via both 1inch and Odos, allowing for more optimal execution routes and future scalability. * Cleaner interfaces for dynamic helpers (CurveDolaLPHelper, ERC4626Helper, and YVYCRVHelper), reducing complexity and the risk of errors. This upgrade significantly reduces maintenance overhead by enabling quicker deployment of new markets and collateral types without repeated code rewrites. Furthermore, it enhances UX by enabling direct DOLA entry for supported markets, eliminating unnecessary pre-zap actions. ## Implementation The following contracts have been deployed and reviewed: * ALE V2:[ 0x4dF2EaA1658a220FDB415B9966a9ae7c3d16e240](https://etherscan.io/address/0x4df2eaa1658a220fdb415b9966a9ae7c3d16e240) * Pendle PT Helper:[ 0x4809fE7d314c2AE5b2Eb7fa19C1B166434D29141](https://etherscan.io/address/0x4809fE7d314c2AE5b2Eb7fa19C1B166434D29141) * CurveDolaLPHelperDynamic:[ 0x20717e5ee263f2418badad9704b88d98caffac8e](https://etherscan.io/address/0x20717e5ee263f2418badad9704b88d98caffac8e) * CurveSDolaLPHelperDynamic:[ 0x50671bf561ed15a84066db2415d1ef55daf35037](https://etherscan.io/address/0x50671bf561ed15a84066db2415d1ef55daf35037) * ERC4626Helper:[ 0xf2f9b6f0b28f77872acd2da4187021b3b8c73ab8](https://etherscan.io/address/0xf2f9b6f0b28f77872acd2da4187021b3b8c73ab8) * YVYCRVHelper:[ 0xa93dac9b38ab4a23f1fa934eabc7f9639a003c4c](https://etherscan.io/address/0xa93dac9b38ab4a23f1fa934eabc7f9639a003c4c) ALE V2 will also support governance-defined whitelisting of multiple exchange proxies, enabling greater flexibility in future aggregator integrations. Overall, ALE V2 is a key protocol infrastructure upgrade that streamlines leverage execution, reduces risk, and improves user experience on FiRM. ## On-Chain Actions * Set ALE V2 as the leverage engine for all existing FiRM markets: * yv-USR-DOLA * sUSDe-DOLA * yv-sUSDe-DOLA * sUSDS-DOLA * yv-sUSDS-DOLA * scrvUSD-DOLA * yv-scrvUSD-DOLA * deUSD-DOLA * yv-deUSD-DOLA * scrvUSD-sDOLA * yv-scrvUSD-sDOLA * PT-sUSDe-27Mar25 * PT-sUSDe-29May25
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# [6/7] Update to Pectra-Compliant FiRM Borrow Controller Forum Link: https://forum.inverse.finance/t/update-to-pectra-compliant-firm-borrow-controller/547 ### Summary This proposal seeks to update the FiRM Borrow Controller across all active markets to a newly-deployed, Pectra-compliant version, addressing security risks introduced by [EIP-7702](https://github.com/ethereum/EIPs/blob/master/EIPS/eip-7702.md#self-sponsoring-allowing-txorigin-to-set-code). The upgrade ensures continued protection against flash loan exploits, reentrancy, and atomic transaction manipulations, while maintaining all previously implemented risk controls such as the rolling 24-hour borrow limit and daily borrow caps. ### Background The borrow controller in FiRM plays a crucial role in risk management, ensuring that borrowing transactions comply with security measures such as: * **Minimum Debt Amount**: Protecting the protocol from griefing by enforcing a minimum market debt allowed to be carried per user. * **Smart Contract Verification**: Restricting borrowing from unauthorized smart contracts to mitigate risk. * **Rolling 24-Hour Borrow Limit**: Preventing exploitative behaviors related to fixed-time resets. * **Staleness Threshold**: Addressing stale oracle data exploits by preventing borrowing when price feeds have not updated within a governance-defined timeframe. However, with the first phase of the Pectra hard fork scheduled for mid-March 2025, [Ethereum's EIP-7702](https://mixbytes.io/blog/the-prague-electra-pectra-hardfork-explained) introduces the ability for EOAs (externally owned accounts) to delegate execution to smart contracts, effectively bypassing FiRM’s existing protections against flash loans and reentrancy attacks. To mitigate these risks, the new borrow controller enforces a stricter validation, combining `tx.origin == msg.sender` with `msg.sender.code.length == 0` to ensure that the caller is not a delegated smart contract. In doing so, it ensures full compatibility with the Pectra hard fork, maintaining security without sacrificing user experience. The new borrow controller has been rigorously tested on the Prague EVM and reviewed by 3rd parties, both of which confirm it correctly blocks unauthorized delegated transactions while maintaining expected protocol functionality. ### Implementation Plan This proposal will standardize the borrow controller across all active markets, eliminating existing discrepancies and bringing the rolling 24-hour borrow limit to all markets. All previously whitelisted addresses as well as market-specific daily borrow limits, staleness thresholds, and min debts will need to be set. As such with 33 live markets, this will require over 100 on-chain actions. As each proposal is limited to 20 on-chain actions, this will be spread out across 7 proposals. This is Proposal # 6 of 7 and will apply to the following... ### On-Chain Actions 1. Set the Borrow Controller and Inherit All Existing Borrow Parameters for the following FiRM Markets: - yv-scrvUSD/sDOLA, yv-DOLA/USR, PT-sUSDe-27MAR25, PT-sUSDe-29MAY25
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# Fix WBTC FiRM Price Feed and Return Whitehatted Funds # Fix WBTC FiRM Price Feed and Return Whitehat Funds Forum Post: https://forum.inverse.finance/t/fix-wbtc-firm-price-feed-and-return-whitehatted-funds/556 ## Background [Proposal 278](https://www.inverse.finance/governance/proposals/mills/278) aimed to standardize the price feeds for WETH and WBTC by leveraging the ChainlinkBridgeAssetFeed logic. Shortly after the proposal was executed, contributors identified an error in the tokenDecimals parameter for WBTC that caused the FiRM oracle to underprice WBTC significantly. Three users with open debt positions in the WBTC market were affected. In response, a proactive [whitehat intervention was carried out by TWG](https://etherscan.io/tx/0x45868e2720974a6359f70e7084319716a7f82010ef28e366d7483d52817f2504) in the amount of 5.68 WBTC to secure the at-risk funds. ## Root Cause The tokenDecimals value for WBTC was incorrectly set to 18, the standard for most ERC20 tokens used in FiRM. However, WBTC is a non-standard ERC20 with 8 decimals. This misconfiguration caused the price feed to understate WBTC’s value in DOLA terms by a factor of 10¹⁰. ## Process Improvements Going Forward This incident is a reminder that even with thorough contributor diligence and proof-of-review processes, human error remains a risk and requires stronger automated validation tools and more structured “sanity checks” in the short term, while minimizing direct human intervention in critical parameter settings in the long term. Further improvements to the pre-proposal internal review processes include: #### Proof-of-Review Process Enhancement A new Proof-of-Review (PoR) system is being introduced that will incorporate sanity check hooks, and fork testing (depending on the proposal type). These could include verifying that the Oracle and BorrowController are the latest versions, confirming that the price moves correctly with the underlying oracle feeds, and ensuring that the price, liquidation parameters, and minimum debt parameter are all within reasonable bounds. This new PoR system will require UI-enforced sign-offs from a member of the Risk Working Group, the Product Working Group involved in contract deployment, and a governance delegate. Any proposal that could impact user funds will have to pass these new formalized checkpoints before they can be submitted. #### UI-Linked Risk Signaling We recognize that UI elements on our governance site intended to make proposal on-chain action setting and reading more human-friendly can give reviewers false confidence. The Risk and Product Working Group will work closely to introduce explicit warnings and parameter previews for on-chain proposals, tying in the PoR system and making discrepancies more obvious at the point of review. One example includes a UI preview for FiRM-related proposals that displays post-simulation positions and market data. #### Contract-Level Guards (Long-Term) In future iterations of FiRM, governance-controlled price feed updates and other sensitive parameter changes will be restricted or gated by contract-level sanity checks. These restrictions will reject extreme or suspicious values automatically, reducing the probability of human error affecting live markets. ## Resolution Plan: Feed Fix and Return of Funds Since 100% of the at-risk funds were successfully secured through whitehat efforts, all three impacted users can be fully restored to their pre-incident state once the feed is corrected. The following actions will resolve the issue: * Correct the WBTC feed on FiRM by updating tokenDecimals to 8. * Return WBTC to the affected users’ FiRM PCE addresses: * Return 0.97806938 WBTC to 0x5e5d086781Ec430E56bd4410b0Af106B86292339 * Return 3.59144374 WBTC to 0x52555b437EeE8F55a7897B4E1F8fB3e7Edb2b344 * Return 1.11234807 WBTC to 0xE58ED128325A33afD08e90187dB0640619819413 These steps will fully restore user balances and ensure the WBTC market is functioning correctly. UI Sim screenshot of the above actions executed: ![|2048x814](https://lh7-rt.googleusercontent.com/docsz/AD_4nXdY2kx7g9eZxfqSiXpYhZX_4ui-cUCS_1x4_VV-nxtvKiPGM7SyLjb8Nvykxxk4NTNzykw-MFFJD2X-pjVT3de6q_X9uO18MCJ1ABIcHRHemppMdZBtNC77NdWu3Q9LZBCUGd4U5A?key=HQxbJtXJbCq-QGtkNb0q2Lb5)
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# Helper Proposal: Set Liquidation Incentive to 5% for PT-sUSDe-29MAY2025 # Helper Proposal: Set Liquidation Incentive to 5% for PT-sUSDe-29MAY2025 Forum post: https://forum.inverse.finance/t/helper-proposal-set-liquidation-incentive-to-5-for-pt-susde-29may2025/553 ## Summary Proposal 276, “[*Add PT-sUSDe-29MAY2025 Market to FiRM*](https://www.inverse.finance/governance/proposals/mills/276)”, cannot currently be executed due to the following issue: * The market was deployed with the default liquidation incentive (LI) of 10% and collateral factor (CF) of 50%, despite the proposal’s intent to adjust the LI to 5% and CF to 91.5% * The on-chain execution sequence attempts to set the CF to 91.5% before updating the LI * This causes a revert, as the combined CF+LI exceeds 100%, violating safety constraints and enabling potential profitable self-liquidations To resolve this, a helper proposal is required to first reduce the liquidation incentive for PT-sUSDe-29MAY2025 to 5%. Once this is in place, Proposal 276 can be executed successfully. ## On-Chain Actions * Set liquidation Incentive of PT-sUSDe-29MAY2025 to 5%
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# Proposal to Add DOLA/USR Yearn LP Market to FiRM Forum Link: https://forum.inverse.finance/t/proposal-to-add-dola-usr-yearn-lp-market-to-firm/545 ### Summary This proposal seeks to introduce the DOLA/USR Liquidity Pool Token (LPT) from Curve Finance as a collateral option on FiRM, Inverse Finance’s fixed-rate lending protocol. The DOLA/USR LP offers unique advantages due to its stable composition and points program, providing a unique opportunity for capital efficient lending by offering stable liquidity positions that include DOLA as collateral. USR is an ETH-hedged stablecoin developed by Resolv Labs, employing delta-neutral futures positions and an overcollateralization fund (OCF) for peg stability. We plan to deploy two distinct markets; one that adheres to the convex strategy and a market which, utilizing the same underlying LPT, aligns with Yearn’s autocompound strategy. This proposal pertains to the Yearn-aligned DOLA/USR LP market on FiRM. ### Background USR is backed by ETH and a delta-neutral hedging strategy that uses short perp futures to mitigate price volatility. Resolv’s OCF mechanism, partial T-Bill collateralization, and RLP insurance layer offer a sturdy foundation for USR’s peg, while the staked variant (stUSR, or wstUSR) captures daily yields. In this proposal, we focus on the Yearn-based DOLA/USR LP, which auto-compounds rewards and fosters deeper liquidity through yield reinvestment. By leveraging the DOLA/USR LP as collateral, FiRM offers its users the opportunity to capitalize on stable liquidity positions while bolstering our ecosystem’s efficiency and DOLA liquidity depth. Providing stable liquidity positions that include DOLA as collateral allows for cost-efficient lending on behalf of Inverse Finance. Typically, borrowers sell DOLA to buy other assets, impacting DOLA liquidity. Conversely, a borrower collateralizing with a DOLA LP position is likely to add the other stablecoin/s to the liquidity pool initially to obtain the LPT. They may then loop the borrowed DOLA into the LP position repeatedly to increase their reward, benefiting DOLA liquidity as it does not remove other stablecoins. This results in a 150% improvement in lending capital efficiency, as only 1 DOLA needs to be contracted by our AMM Feds for each DOLA added to the liquidity position, compared to 2.5 DOLAs for each DOLA sold. ### Risk Assessment [Complete Risk Assessment – USR Collaterals on FiRM](https://docs.google.com/document/d/1zSCvnfxMOSKfqKT-BuFI4bKcu5NJOYfrURZVWkVxuH8/edit?usp=sharing) Key points from the assessment include: 1. Governance: Resolv Labs currently oversees USR minting and redemption parameters through an administrative multisig. Though the protocol plans to transition to a $RESOLV governance token, whitelisted addresses still hold exclusive permission to mint or redeem. Users must rely on Resolv’s operational integrity and roadmap commitments until permissionless minting is fully realized. 2. Security: Audits of USR, RLP, staking contracts (including wstUSR), and related Request Manager logic were conducted by reputable firms such as MixBytes, Pessimistic, and Pashov. No critical vulnerabilities remain unresolved. However, partial reliance on off-exchange custody (Fireblocks, Ceffu) for hedging entails some exposure to exchange or custodian compromise. A bug bounty program (expected post-$RESOLV launch) will provide a secondary security layer. 3. Regulatory Risks: USR’s design mixes crypto-collateralization (ETH, stETH) and T-Bill–backed assets (via MakerDAO’s USDS). Future regulatory actions against stablecoins, tokenized securities (RWA), or off-exchange custodians could disrupt Resolv’s mint/redeem flows. Regional compliance changes or centralized exchange constraints might also hamper the delta-neutral hedging strategy. 4. Collateral & Liquidity: Because USR is hedged against ETH price movements, its peg remains stable so long as derivatives markets remain liquid. Large-scale USR redemptions still rely on whitelisted participants, but secondary liquidity pools (Uniswap, Curve, Aerodrome) and an on-chain bridging mechanism (LayerZero’s Stargate) help maintain healthy liquidity. 5. Competitive Edge: Unlike purely crypto-backed stablecoins, USR incorporates T-Bill yields via partial MakerDAO integration while leveraging a delta-neutral approach. This structure appeals to users seeking a stable, yield-enriched asset with robust risk mitigations. 6. Oracle & Price Feeds: FiRM will implement a pessimistic LP token oracle for accurate valuation of the DOLA/USR LP. This process uses Chainlink price feeds for USR and the virtual price from the Curve pool’s smart contract and ensures a conservative and reliable estimate of the LP token's USD value. Real-time monitoring will further support price accuracy and integrity. 7. Liquidation Mechanisms: The liquidation factor and incentive are optimized to encourage active liquidator participation. Arbitrage opportunities with other DOLA or USR LPs will ensure that large liquidations do not lead to a liquidation cascade. The liquidation process will pull vault tokens, convert them to LP tokens, and then allow liquidators to realize value through balanced withdrawals, ensuring efficient liquidation routes. Continuous monitoring of the DOLA/USR LP’s performance, yields, and liquidity conditions will be maintained by the RWG. Should any material changes or newly identified risks emerge, parameter adjustments or additional mitigations will be proposed via governance. ### On-Chain Actions 1. Add DOLA/USR LP Yearn Market to DBR Contract 2. Set borrowController of Market to FiRM BorrowController 3. Set Market Supply Ceiling to 10,000,000 DOLA 4. Set Daily Limit in BorrowController to 2,000,000 DOLA 5. Set Collateral Factor to 90% 6. Set Liquidation Factor to 100% 7. Set Liquidation Incentive to 5% 8. Approve DOLA/USR LP Yearn Market on the DBR Helper 9. Set Minimum Debt Amount in BorrowController to 3,000 DOLA 10. Set stalenessThreshold for DOLA/USR Yearn LP market to 86460 (24 hours) 11. Set FiRM Oracle Price Feed for DOLA/USR Yearn LP to the deployed custom tokenPriceFeed contract 12. Add DOLA/USR LP Yearn Market to ALE 13. Add DOLA/USR LP Yearn Market to CurveDolaLPHelper
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# Unpause the PT-sUSDe-27MAR25 FiRM Market # Unpause the PT-sUSDe-27MAR25 FiRM Market Forum Link: https://forum.inverse.finance/t/unpause-the-pt-susde-27mar25-firm-market/540 ### Background In November 2024, the [DAO approved](https://www.inverse.finance/governance/proposals/mills/227) PT-sUSDe-27MAR25 as a FiRM market collateral. In mid-January, the RWG exercised its guardian role to pause borrowing—not due to risk concerns but to optimize FiRM operations in response to highly favorable lending conditions in Curve liquidity pools. ### Objective With vote incentive efficiencies in the Curve ecosystem declining from their November–January highs, the rationale for keeping borrowing paused is no longer as compelling. Although PT-sUSDe-27MAR25 matures in a few weeks, reopening borrowing ensures that any remaining demand can be met. Additionally, PT-sUSDe-29MAY25 is expected to be presented for DAO approval soon, providing a seamless rollover option for existing debt holders. ### On-Chain Action * Unpause borrowing on the PT-sUSDe-27MAR25 collateral
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# Proposal to Add DOLA/deUSD Convex LP Market to FiRM Forum Link: https://forum.inverse.finance/t/proposal-to-add-dola-deusd-convex-lp-market-to-firm/536 ### Summary This proposal aims to integrate the DOLA/deUSD Liquidity Pool Token (LPT) from Curve Finance as a collateral option on FiRM, Inverse Finance’s fixed-rate lending protocol. The DOLA/deUSD LP offers unique advantages due to its stable composition and points or “potions” program, providing a unique opportunity for capital efficient lending by offering stable liquidity positions that include DOLA as collateral. We plan to deploy two distinct markets; one that adheres to the convex strategy and a market which, utilizing the same underlying LPT, aligns with Yearn’s autocompound strategy. This proposal pertains to the Convex-aligned deUSD/DOLA LP market on FiRM. ### Background deUSD is a yield-bearing, ETH-hedged stablecoin developed by Elixir Labs, partially backed by stETH and T-Bills through MakerDAO’s USDS. Its delta-neutral design and Over Collateralization Fund (OCF) seek to maintain a robust $1 peg even in adverse funding conditions. By leveraging the DOLA/deUSD LP as collateral, FiRM offers its users the opportunity to capitalize on stable liquidity positions while bolstering our ecosystem’s efficiency and DOLA liquidity depth. Providing stable liquidity positions that include DOLA as collateral allows for cost-efficient lending on behalf of Inverse Finance. Typically, borrowers sell DOLA to buy other assets, impacting DOLA liquidity. Conversely, a borrower collateralizing with a DOLA LP position is likely to add the other stablecoin/s to the liquidity pool initially to obtain the LPT. They may then loop the borrowed DOLA into the LP position repeatedly to increase their reward, benefiting DOLA liquidity as it does not remove other stablecoins. This results in a 150% improvement in lending capital efficiency, as only 1 DOLA needs to be contracted by our AMM Feds for each DOLA added to the liquidity position, compared to 2.5 DOLAs for each DOLA sold. ### Risk Assessment [Complete Risk Assessment – deUSD Collaterals on FiRM](https://docs.google.com/document/d/1M0kYgqUwRPkX4AZsYmdiCOwhcqr9hCEdThX5JT8g4Is/edit?usp=sharing) Key points from the assessment include: 1. **Governance**: Elixir Labs currently manages deUSD minting under a delegated proof-of-stake (DPoS) framework. While the protocol aims for decentralized governance by transitioning upgrade controls and treasury parameters to ELX token holders, whitelisted “authorized participants” currently retain exclusive mint/redeem permissions. Until permissionless minting is fully implemented, governance decisions rest partly with Elixir Labs’ multisig structures, meaning users must trust the team’s operational integrity and future roadmap commitments. 2. **Security**: Elixir’s main deUSD and staking (sdeUSD) contracts have been audited by Trail of Bits and Quantstamp, with no significant unresolved issues. Nevertheless, partial reliance on off-exchange storage (OES) for hedging activities introduce potential attack vectors. Ongoing Immunefi bug bounty programs aim to reinforce the protocol’s security, but users should remain aware of custodial dependencies. 3. **Regulatory Risks**: As a synthetic stablecoin mixing delta-neutral crypto strategies and T-Bill–backed collateral, deUSD may face scrutiny in jurisdictions regulating stablecoins or asset tokenization. Additionally, the reliance on off-exchange custodians (e.g., Fireblocks) introduces potential compliance obligations that could evolve rapidly. Regulatory actions targeting stablecoin issuance, derivatives trading, or RWA tokenization could impede deUSD’s minting/redemption processes or hamper cross-border liquidity. 4. **Collateral & Liquidity**: deUSD’s on-chain liquidity is primarily sourced from Curve pools and partnerships (e.g., DOLA–deUSD LP), but large positions often rely on off-chain whitelisting to mint or redeem without slippage. Sufficient market depth and transparent OCF metrics are critical to maintaining stable liquidity profiles. 5. **Competitive Edge**: deUSD distinguishes itself through its blend of delta-neutral crypto yields and real-world T-Bill integration, offering an alternative to purely crypto-backed stablecoins. Securitize-based RWAs (e.g., BlackRock BUIDL) bring further institutional exposure. 6. **Oracle & Price Feeds**: FiRM will implement a pessimistic LP token oracle for accurate valuation of the DOLA/deUSD LP. This process uses Chainlink price feeds for deUSD and the virtual price from the Curve pool’s smart contract and ensures a conservative and reliable estimate of the LP token's USD value. Real-time monitoring will further support price accuracy and integrity. 7. **Liquidation Mechanisms**: The liquidation factor and incentive are optimized to encourage active liquidator participation. Arbitrage opportunities with other DOLA or deUSD LPs will ensure that large liquidations do not lead to a liquidation cascade. The liquidation process will pull vault tokens, convert them to LP tokens, and then allow liquidators to realize value through balanced withdrawals, ensuring efficient liquidation routes. Continuous monitoring of the DOLA/deUSD LP’s performance, yields, and liquidity conditions will be maintained by the RWG. Should any material changes or newly identified risks emerge, parameter adjustments or additional mitigations will be proposed via governance. ### On-Chain Actions 1. Add DOLA/deUSD LP Convex Market to DBR Contract 2. Set borrowController of Market to FiRM BorrowController 3. Set Market Supply Ceiling to 10,000,000 DOLA 4. Set Daily Limit in BorrowController to 2,000,000 DOLA 5. Set Collateral Factor to 90% 6. Set Liquidation Factor to 100% 7. Set Liquidation Incentive to 5% 8. Approve DOLA/deUSD LP Convex Market on the DBR Helper 9. Set Minimum Debt Amount in BorrowController to 3,000 DOLA 10. Set stalenessThreshold for DOLA/deUSD Convex LP market to 86460 (24 hours) 11. Set FiRM Oracle Price Feed for DOLA/deUSD Convex LP to the deployed custom tokenPriceFeed contract 12. Add DOLA/deUSD LP Convex Market to ALE 13. Add DOLA/deUSD LP Convex Market to CurveDolaLPHelper
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# Set New SaleHandler for Use by the Virtual XY=K DBR Auction # Set New SaleHandler for Use by the Virtual XY=K DBR Auction Forum Post: https://forum.inverse.finance/t/set-new-salehandler-for-use-by-the-virtual-xy-k-dbr-auction/530 ## Background The virtual XY=K DBR auction, [launched in January 2024](https://www.inverse.finance/governance/proposals/mills/164), has been instrumental in managing DBR issuance and facilitating DOLA bad debt repayment. Over the past year, this mechanism has contributed more than $2 million in bad debt repayments. The current SaleHandler directs all DOLA revenue from auction sales exclusively toward bad debt repayment on Frontier. ## Objective This proposal seeks to implement a new SaleHandler that retains the existing functionality of automated bad debt repayment while introducing additional flexibility. Specifically, it will allow a repayment percentage to be set, directing that portion of revenue toward automated bad debt repayment. The remaining revenue will be transferred to the TWG ETH multisig for discretionary use. The updated SaleHandler will enable the TWG to allocate DOLA revenue across three key categories: * Liquidity Incentivization: Utilize DOLA to incentivize liquidity in DOLA and INV pools * Manual Bad Debt Repayment: Allocate DOLA for targeted bad debt repayments on Frontier or other platforms, continuing the practice of millions in repayments to date * Treasury Revenue: the DOLA can be sent to the DAO Treasury, adding to the current stablecoin cash balance For the foreseeable future, 100% of the DOLA allocated to the TWG is intended to support liquidity incentivization. This approach will help stabilize DOLA’s peg without significantly impacting debt levels on FiRM. ## Liquidity Incentivization Since mid-October 2024, the TWG has operated under a net-zero INV inflation policy for liquidity incentivization. Instead, revenue from treasury assets and Feds has been utilized. Most of this revenue comes from combining the Aero Fed and TWG’s veAERO position to generate significant returns. This strategy has made the Fed Chair hesitant to approve contractions of the Aero Fed when DOLA’s peg on Base is below its target range. Such contractions would reduce the budget for DOLA liquidity incentivization at a time when it is critically needed. The new SaleHandler addresses this issue by enabling a portion of FiRM’s revenue to supplement liquidity incentivization efforts. Upon execution of this proposal, the Fed Chair will be able to contract the Aero Fed, which should strengthen DOLA’s USD peg through: * Reduced Supply: Contraction aligns DOLA’s supply with current demand. * Enhanced Pool Attractiveness: Reducing TVL in the DOLA/USDC pool on Aero while maintaining rewards increases yield, encouraging new participants to buy DOLA and farm. This approach will make DOLA more attractive to borrow (short) when on-peg, potentially increasing FiRM’s debt level. Additionally, the current high vote incentive efficiency on platforms like Curve can generate more DBR burn than the amount issued via the auction, provided the spread between Curve LP yields and DBR’s average price remains manageable. ## Minimum Repay Requirement The new SaleHandler introduces a `minRepayBps` parameter, controlled by governance, which sets the minimum percentage of auction revenue allocated to trustless DOLA bad debt repayment. The TWG, as the SaleHandler beneficiary, can dynamically adjust the live `repayBps` between this minimum and 100%. We propose setting the initial minRepayBps at 20% (2000 bps), allowing up to 80% of auction revenue to be directed to the TWG. This allocation reflects the current low DBR issuance via the auction, necessitating a larger portion of revenue for DOLA liquidity incentivization. As DOLA regains its peg, DBR issuance can increase, enabling a higher percentage of auction revenue to be redirected toward bad debt repayment. ## Summary Implementing the new SaleHandler will: * Retain automated bad debt repayment functionality. * Introduce flexibility for TWG to allocate revenue across liquidity incentivization, manual debt repayment, and treasury funding. * Enhance DOLA’s peg stability by supplementing liquidity incentivization efforts with FiRM revenue. * Allow for dynamic adjustment of repayment rates, balancing debt reduction with market demands. Governance approval of this proposal will equip the TWG and Fed Chair with the tools needed to support DOLA’s peg, optimize liquidity strategies, and maximize DBR burn efficiency. The initial `minRepayBps` of 20% ensures continued focus on debt repayment while addressing the immediate need for liquidity incentivization. On-Chain Actions * Call `sendToSaleHandler` * Set the new [saleHandler](https://etherscan.io/address/0x4f4a31c1c11bdd438cf0c7668d6afa2b5825932e#readContract) to on the virtual auction * Set `minRepayBps` to 2000 (20%)
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# Adjust sDOLA Auction and DSA Parameters # Adjust sDOLA Auction and DSA Parameters Forum Post: https://forum.inverse.finance/t/adjust-sdola-auction-and-dsa-parameters/528 ## Background sDOLA and the DSA were [launched in February 2024](https://forum.inverse.finance/t/launch-dsa-and-sdola/361) and have collectively returned over $168,000 to holders. Initially, sDOLA TVL growth was slow, taking nearly two months to reach $1M and another four months to achieve $2M. However, stronger PMF (Product-Market Fit) emerged in December 2024, with TVL surging from $1.7M on December 3rd to $8.05M as of today. ## Objective sDOLA has demonstrated strong PMF across three key avenues: 1. **Yield Holders** - sDOLA is now consistently the highest yield-bearing stablecoin. This has attracted an increasing number of wallets that hold sDOLA purely for its raw yield. 2. **Curve Pools** - Stableswap-ng pools handle sDOLA yield, fully returning it to liquidity providers. This makes sDOLA a compelling stablecoin for other issuers to pair with due to its constant yield. Current pairings include: - **[sDOLA/scrvUSD](https://curve.fi/#/ethereum/pools/factory-stable-ng-297/deposit):** ~$2.7M TVL - **[sDOLA/alUSD](https://curve.fi/#/ethereum/pools/factory-stable-ng-320/deposit):** ~$2.7M TVL 3. **Lending Markets** - sDOLA as collateral in lending markets allows users to leverage the spread between sDOLA yield and borrowing costs. It also enables leveraging DOLA during depegs for potential profits upon repegging. Key metrics: - **[Curve Lend](https://lend.curve.fi/#/ethereum/markets/one-way-market-17/create):** ~$3.05M sDOLA collateral with ~$2.63M crvUSD borrowed - **[FraxLend](https://app.frax.finance/fraxlend/pair?address=0x48f32B7c960fD0280297F6F0182E2607a3398Db5):** ~$550K sDOLA collateral with ~$460K FRAX borrowed sDOLA benefits the DAO by driving DOLA purchases from the open market. This creates equivalent lending capacity, which, when utilized, results in more DBR burn than DBR issuance spent. --- ## Proposed Adjustments ### 1. DSA Parameters **Max DBR per DOLA per Year** - **Current:** 0.99 - **Proposed:** 0.95 - **Rationale:** Lowering the maximum DBR per DOLA per year increases the DAO margin, incentivizing further sDOLA scaling. Each DSA deposit would cost 0.95 DBR/year to generate an additional 1 DBR burn. If the debt is directed into a DOLA LP (e.g., leveraged DOLA LP on FiRM) rather than sold, the efficiency increases to approximately 2.5 DBR burn per 0.95 DBR spent. [Read more in the prior proposal](https://forum.inverse.finance/t/launch-dsa-and-sdola/361#max-dbr-per-dola-per-year-dsa-11). **Max Yearly Reward Budget** - **Current:** 10M DBR/year - **Proposed:** 30M DBR/year - **Rationale:** Tripling the yearly reward budget ensures sDOLA has sufficient room to scale into emerging opportunities at the proposed max DBR rate, fully capitalizing on its potential. ### 2. sDOLA Auction **Objective:** The recent influx of sDOLA deposits presents an opportunity to deepen the auction while maintaining profitable arbitrage opportunities for participants. A deeper auction tightens the spread between the auction sell price and the DBR market price, reducing gas cost barriers and increasing sDOLA APY. **Recommended Actions:** 1. **Increase dbrReserve to ~300K DBR:** - Gradually allocate ~252,240 DBR into the sDOLA contract over 7 days post-proposal approval. This staggered approach aligns with the K value ramp-up, ensuring arbitrage profitability remains stable. 2. **Increase K Value:** - **Current:** 3.25E+44 - **Proposed:** 1.26E+46 - **Rationale:** Deepening the auction balances sDOLA APY stability while ensuring the open market remains the primary venue for DBR trading. Excessive depth could cause prolonged revenue dips if DBR prices fall sharply, so maintaining moderation is crucial. --- ## Yield Adjustment Overview While reducing the max DBR per DOLA per year slightly decreases the DSA APR, sDOLA average yield is expected to rise due to the tighter auction spreads achieved through enhanced depth. ## Conclusion These adjustments ensure sDOLA continues scaling effectively while maximizing benefits for the DAO and its stakeholders. By refining key parameters and leveraging recent momentum, this proposal seeks to cement sDOLA position as a leading stablecoin in the ecosystem. --- ## On Chain Actions * setMaxRewardPerDolaMantissa to 0.95 * setMaxYearlyRewardBudget to 30m * setTargetK to 1.26E+46
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