Today we have successfully deployed our own, in-house developed investment vault, which allows us to invest a maximum of 75% of the idle USDC collateral to generate a more sustainable stream of USDC income to users staking TITAN.
Live USDC vault stats can be tracked via our Treasury page at polygon.iron.finance/treasury and will also include historical daily data shortly for full transparency on data.
Even though we had a governance vote on the two ratios of the investment vaults which is now deployed to IronFinance Polygon, the participation in the vote was so low that we have decided to use the same ratios that we had previously used for our investment vaults on the BinanceSmartChain and which has served the protocol well. This means a maximum of 75% of all the USDC collateral will be invested and profits this investment makes will be distributed to the TITAN staking pool. In some cases, a part of this income may be used to increase the ECR% (the amount of USDC collateral). As we previously said, the maximum of 75% of the USDC collateral is invested into AAVE and this USDC investment has no locked rewards, no lock-up periods and no leverage to demonstrate our tech before we increase complexity. Later we may diversify and post a governance vote about investing a part of the investable collateral to other protocols and develop further strategies. The remaining 25% of the USDC collateral which is not invested, is kept at the protocol to serve the average daily IRON redemptions. If this amount would decrease to 15% due to higher than average redemptions, then the protocol will instruct the investment vaults smart-contract to withdraw some of the invested USDC collateral from AAVE to increase the amount of USDC collateral the protocol stores to serve the redemptions.
BSC Vault release
After thorough discussions we decided, for now, we will not deploy investment vaults to our protocols on BSC, because from an economical point of view, it would make no sense. It would not only have a negative effect on the amount of rewards the STEEL and DND staking pools would receive from the investment vaults, but it would even decrease the amount, because of the low maximum investable idle collateral, due to the low supply of IRON and dTokens, would generate just a few hundred dollars of revenue per day at best. For this reason, the team has made the decisions that we are going to continue paying the rewards from the Treasury until the protocols on BSC grows significantly to the point where investing a maximum of 75% of the idle collateral generates more income than the amount of funds it currently receives from the Treasury.
Furthermore, as you may have been informed, unfortunately, there have been numerous flash-loan type of attacks on the BinanceSmartChain and at this point of time we are not confident which protocol on BSC is safe from this attack to safely invest theBUSD collateral. You may remember that our all-time high IRON supply on BSC was slightly above 52 million and even before the ValueDefi flash-loan attack, it was around 35 million. The ValueDefi hacker dumped a lot of STEEL on the market which had a negative effect on the rewards and the supply of IRON and dTokens went down even further. Consequently, at this point in time, we are not willing to risk part of the idle BUSD collateral on the BinanceSmartChain.
The IronFinance lending platform is coming to both the BinanceSmartChain and to the Polygon network as well and we are going to publish a separate article about this in due course. In short, lending will connect IronFinance with DiamondHand and our users will be able to borrow in IRON against dTokens and lend IRON to borrowers. Consequently, with our lending platform, we are going to deploy the dToken equivalent synth tokens to Polygon as well.