Hey everyone, after reading the comments and in the spirit of moving this proposal forward, please review the copy below to officially submit it as BIP-0003:
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Introduction:
The idea to introduce an insurance fund for XUSD is at the heart of BabelFish’s mission. Many of us are in this “industry” because we see Bitcoin as the best insurance available in this topsy turvy world. Many of us are in the babelfish community because of the original promise to overcollateralize the babelfish collateral with bitcoin.
Reasoning:
BabelFish’s alpha version of the XUSD stablecoin aggregator is collateralized 1:1 with aggregated stablecoins. The next stages of development require i) hedging the stablecoin basket, building a saving product and accumulating bitcoin with earned yield. We reason that a supra bitcoin insurance fund allocation should be made explicit while awaiting protocol improvements to earn yield. Furthermore, this bitcoin allocation should be lent out on the RSK ecosystem to accrue yield, starting with Sovryn but subject to change via DAO proposals.
Detailed Info:
Given that this is a symbolic BTC allocation is to make the protocol goals’ explicit and more tangible, so too shall the allocation have a symbolic value of no more than 1 BTC from the protocol’s available funds. This initial BTC will be transferred to a special-purpose multi-sig, where all yield accrued will remain and its use is subject to the DAO votes. The allocation is purposely small (relative to XUSD outstanding) because BabelFish’s objective is to accumulate bitcoin by lending collateral and ideally reach over 50% in over-collateralization. This foundation of the insurance fund will enable bitcoin to begin making progress towards our long-term objectives while development of the lending product is completed."