The recent proposal to remove mUSD in the Feeder Pools from the Iron Bank was passed with MIP 23. The contracts to replace the integration are almost ready. However, the migration of both pools is not possible at the same time, because some mUSD is still lent out. Therefore I would like to propose to increase the cached amount to 20% (maximum) to reduce the interaction with the Iron Bank upon depositing into the mUSD/BUSD Feeder Pool.
One Feeder Pool can be migrated to the dummy integration contract as specified in MIP 23. In the first step, this should be the mUSD/GUSD Feeder Pool, since this pool has a higher TVL.
For the second pool Feeder Pool (mUSD/BUSD) a migration is at the time not possible. Therefore an increase of the cache to
20% would limit the deposits into the Iron Bank and allow for cheaper transactions, while also increasing the interest rate in the Iron Bank for the borrower.
Eventually, the second feeder pool should migrate as well, once the loaned out amount is paid back.
This RFC would help with the migration from the Iron Bank to the dummy integration contract. It would in effect lower the amount of mUSD in the Iron Bank, increase the borrowing APY and increase the pressure to repay the loaned amount. In addition, this would also decrease the interaction with the Iron Bank and allow for better a functioning mUSD/BUSD Feeder Pool.
- Reduce the amount that is in the Iron Bank
- Increase APY to make a repayment of the loaned amount more attractive
- Probably none