Proposal #37
Referendum #35
Activation of USDT as a Vault collateral on Interlay
Democracy
2 Comments
NotPassed

UPDATE: Please vote NO/NAY on the proposal!

The Interlay team has recently discovered an issue with the XCM transfers implemented between Interlay and Statemint. Until the teams fix this, they recommend that everyone votes no on the referendum to activate USDT vaults to avoid loss of funds or USDT funds being blocked on Interlay.

A new type of vault can be activated using USDT via Statemint as collateral. More details below.

Proposal

Based on the discussion post on Interlay (https://interlay.subsquare.io/post/14), I propose the activation of USDT as a vault collateral on interlay.

Please find below the parameter configuration proposed for the "USDT vaults":

  • Initial collateral ceiling: 200.000,00 USD equivalent
  • Secure collateral threshold: 155%
  • Premium redeem threshold: 145%
  • Liquidation threshold: 135%
  • Minimum collateral threshold: 150 USDT

Resources:

USDT Asset Registered: https://interlay.subsquare.io/democracy/referendum/27
Interlay - Statemint XCM Channel: https://interlay.subsquare.io/democracy/referendum/32
Governance guides: https://docs.interlay.io/#/guides/governance (incl. how to make a proposal)
Python code used for analysis of new assets proposed as vault collateral: https://github.com/interlay/collateralization-analysis

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Metadata
Proposer
Hash
Delay
02022-12-14 06:34:00
End
02022-12-14 06:34:00
Threshold
Call
Table
Json
callIndex0x0302
sectionutility
methodbatchAll
args
calls
0
callIndex0x3d0b
sectionvaultRegistry
methodsetLiquidationCollateralThreshold
args
currencyPair
collateral
foreignAsset2
wrapped
tokenIBTC
threshold1350000000000000000
1
callIndex0x3d0a
sectionvaultRegistry
methodsetPremiumRedeemThreshold
args
currencyPair
collateral
foreignAsset2
wrapped
tokenIBTC
threshold1450000000000000000
2
callIndex0x3d09
sectionvaultRegistry
methodsetSecureCollateralThreshold
args
currencyPair
collateral
foreignAsset2
wrapped
tokenIBTC
threshold1550000000000000000
3
callIndex0x3d08
sectionvaultRegistry
methodsetSystemCollateralCeiling
args
currencyPair
collateral
foreignAsset2
wrapped
tokenIBTC
ceiling200000000000
4
callIndex0x3d07
sectionvaultRegistry
methodsetMinimumCollateral
args
currencyId
foreignAsset2
minimum150000000
TimelineLatest activity undefined
2022-12-05 13:25:48
Proposed
Index
#37
2022-12-06 08:36:42
Tabled
Referenda Index
#35
Deposit
250 vINTR
Depositors
2022-12-06 08:36:42
Started
referendumIndex
35
voteThreshold
SuperMajorityAgainst
2022-12-14 06:34:00
NotPassed
referendumIndex
35
Comments

Hello everyone,

Interlay team here. Despite the USDT vaults being ready, we are calling everyone to vote NO on the current proposal as we have discovered an issue with the XCM transfers and the XCM UI that we are implementing so users can transfers USDT to and from Statemint.

Explanation of the issue:
We discovered late yesterday that our parachain's configuration of the xTokens pallet needs an additional configuration set to allow successful XCM transfers to other parachains using DOT as XCM fees.
This was found during our tests of the UI implementation to send USDT from Interlay to Statemint. The lack of a configured value for xTokens.MinXcmFee meant that the extrinsic was rejected and USDT funds could not be moved back to Statemint. (Note: Sending from Statemint to Interlay worked fine.)

For the best vault experience USDT vaults should be launched together with a safe and tested way to transfer USDT to and from Interlay.

Therefore, in order to avoid users losing funds or potentially having USDT blocked on Interlay until we deploy the fix, we ask everyone and recommend to vote NO on the current referendum.

We plan to fix XCM transfers and XCM UI and will let the community know when it is ready to submit for activation of USDT vaults again.

What happens if the referendum passes?
Nothing will happen with USDT vaults. they will be successfully activated. However, there will be no way via UI to transfer USDT to and from Statemint and transfers from Interlay to Statemint via Polkadot.js will not work and throw the same error mentioned above.

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why not ausd?

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