0x6535020c…89bbsent to0xbeccb6bb…9bf6·#25,753,252·view on Etherscan
# Add sDOLA/reUSD Yearn LP Market to FiRM
# **Proposal to Add sDOLA/reUSD LP Market to FiRM**
Forum Post: https://forum.inverse.finance/t/add-sdola-reusd-lp-market-to-firm/680
## **Summary**
This proposal seeks to add the sDOLA/reUSD Curve LP, deposited via onlyBoost and Yearn, as a collateral market on FiRM.
This market was originally proposed in May 2025 but was ultimately paused following DAO discussion. At the time, the primary concern was not the strategic case for the integration, but Resupply's limited operational history. The view was that the protocol should be given additional time to demonstrate its stability and behaviour before FiRM took on exposure.
More than 15 months have now passed since that discussion, and Resupply has developed considerably. Alongside the additional protocol history, recent integrations between Inverse, Curve and Resupply have materially strengthened the business case for this market.
We believe now is the appropriate time to revisit the integration.
## **Background**
Resupply is a stablecoin and lending protocol built by contributors from the Convex and Yearn ecosystems. Users can deposit yield-bearing lending positions as collateral and borrow reUSD against them, allowing the underlying assets to continue earning yield while unlocking additional capital efficiency.
Resupply launched in March 2025 and has now been live in production for approximately 17 months.
The sDOLA/reUSD FiRM market was [first proposed shortly after Resupply's launch](https://forum.inverse.finance/t/add-sdola-reusd-convex-lp-market-to-firm/563). While the business case received support, the DAO ultimately preferred to allow the protocol more time to mature before proceeding. The proposal was therefore paused in May 2025 with the intention of revisiting it once Resupply had established a longer track record.
Shortly afterwards, in June 2025, Resupply suffered an exploit involving a newly deployed lending market, resulting in approximately 10m reUSD of bad debt. The incident reinforced the value of the DAO's cautious approach at the time. Resupply subsequently completed its bad-debt recovery process and has now operated for more than a year since the incident.
As a result, the DAO now has substantially more information and operational history on which to assess the protocol than was available during the original discussion.
## **Market Business Case**
The business case for this integration has strengthened considerably following the launch of the new sDOLA/crvUSD LlamaLend V2 market.
Resupply has integrated the crvUSD lending side of this market into its protocol, allowing users to deposit crvUSD into the sDOLA LlamaLend V2 market and use the resulting lending position as collateral to borrow reUSD.
This creates a particularly strong alignment between Inverse, Resupply and Curve.
The relationship can form a positive liquidity flywheel:
1. **FiRM enables leverage on the sDOLA/reUSD LP**
Allowing the LP to be used as FiRM collateral gives depositors access to fixed-rate DOLA borrowing and enables leveraged LP strategies. This should increase demand for the LP and make the incentives directed towards it more capital efficient.
2. **Greater LP demand deepens reUSD liquidity**
Additional sDOLA/reUSD liquidity provides reUSD with a deeper liquidity venue and improves its ability to maintain its peg. The Resupply and Convex ecosystems can further support this liquidity through incentives.
3. **Deeper reUSD liquidity enables Resupply to scale**
Stronger reUSD liquidity allows Resupply to support additional borrowing and leverage across its own markets.
4. **Resupply can direct additional capital into the sDOLA LlamaLend V2 market**
Resupply now accepts the crvUSD lending position from the sDOLA/crvUSD LlamaLend V2 market as collateral. Growth in Resupply therefore has the potential to drive additional crvUSD deposits into the market, increasing available liquidity for sDOLA borrowers and allowing the market to scale.
5. **A larger sDOLA market ultimately benefits Inverse**
Greater capacity within the sDOLA LlamaLend market increases the usefulness and potential scale of sDOLA, creating additional demand for DOLA and strengthening sDOLA's position throughout the Curve ecosystem.
The result is a highly synergistic structure where liquidity and borrowing activity can reinforce each other across FiRM, Resupply and LlamaLend.
## **Strategic Alignment**
There is also significant strategic alignment between the teams involved.
Inverse has longstanding relationships with contributors across Convex, Resupply and Yearn, with these teams having collaborated across liquidity, incentives, treasury management and product integrations for several years.
Resupply has consistently demonstrated an interest in growing integrations involving sDOLA. More recently, Resupply's decision to support the new sDOLA LlamaLend V2 market further increases the direct economic alignment between the protocols.
Adding the LP to FiRM provides another mechanism through which all parties can coordinate incentives and capital to grow the same underlying markets rather than competing for liquidity independently.
## **Market Parameters**
Market parameters proposed in accordance with [risk assessment and recommendations from the RWG](https://forum.inverse.finance/t/add-sdola-reusd-lp-market-to-firm/680/2).
* Collateral Factor: 85%
* Liquidation Factor: 100%
* Liquidation Incentive: 5%
* Minimum debt: 3,000 DOLA
For the onlyBoost Market: 0xf9287c29Cb888F4834B7D2757a833D509e7f9D9A
* Supply Ceiling: 1,500,000 DOLA
* Daily Borrow Limit: 350,000 DOLA
For the Yearn market: 0x1fD4985cdd57bDb1eD646B10B7952fCD58946916
* Supply Ceiling: 500,000 DOLA
* Daily Borrow Limit: 150,000 DOLA