Enable A New Vault Type With USDT As Collateral
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Summary

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

Proposal

Currently only DOT is accepted as collateral for vaults. One of the main goals for iBTC stability is to diversify the number of tokens that can be used as collateral. This has also been requested by current iBTC vault operators.

The next asset suggested as collateral is a USD stablecoin - more specifically USDT. It is the stablecoin that we can enable the fastest and has been requested by the currently active vaults.

USDT can be imported from Statemint via Interlay's Crosschain Transfer XCM

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

For context, we run modelling and simulations for every new collateral type as well as many other references and points of comparison before we conclude on the collateral rates.

The next step is hence to activate this vault type with the above parameters via an on-chain governance proposal.

Please be aware that this is only a discussion post and a formal on-chain proposal will follow.

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

Relevant Information For Submitting The Proposal

Extrinsic

https://polkadot.js.org/apps/?rpc=wss%3A%2F%2Fapi.interlay.io%2Fparachain#/extrinsics/decode/0x0302143d0b010200000000010000c7eed829bc1200000000000000003d0a010200000000010000514c516f1f1400000000000000003d09010200000000010000dba9c9b4821500000000000000003d080102000000000100d0ed902e00000000000000000000003d07010200000080d1f008000000000000000000000000

Proposal

https://polkadot.js.org/apps/?rpc=wss%3A%2F%2Fapi.interlay.io%2Fparachain#/extrinsics/decode/0x030208460af9010302143d0b010200000000010000c7eed829bc1200000000000000003d0a010200000000010000514c516f1f1400000000000000003d09010200000000010000dba9c9b4821500000000000000003d080102000000000100d0ed902e00000000000000000000003d07010200000080d1f0080000000000000000000000004600b54b8e3b2b87d7eb7974dc34894f1a64412f9417306e062ae98258375a981da80b00a89c134602

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Note: a proposal has already been submitted here based on the discussion post: https://interlay.subsquare.io/democracy/proposal/37

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