AIP-29.1: Converting Remaining BUSD in AF1.0 lending into USDT
THIS IS THE FIRST VOTE IN THE SERIES OF VOTE FOR THIS AIP
Background:
As part of the process to sunset BUSD from our platform due to Binance delisting, we have closed all the BUSD-pairs farming positions and delisted all BUSD farms as per AIP-25. However, as of January 30th 2024, there is still ~$9.0 Mn of BUSD remaining in the AF1.0 lending vault.
In this discussion thread, we are proposing to convert these remaining BUSD into USDT, deploy them into AF2.0, and allow for the depositors to claim them there.
Rationale:
We believe that these approach makes sense for several reasons
While Binance is still accepting BUSD deposits and will credit them with FDUSD, there is no guarantee how long the scheme will last and so there is a risk that BUSD will no longer be allowed for conversion.
BUSD on AF1.0 is not being productive and not adding value to the Alpaca Finance ecosystem at the moment.
Implementation:
The implementation will follow the steps below:
We will upgrade the deposit contract for the BUSD vault on AF1.0 to allow for admin withdrawal.
All withdrawn BUSD will be sent to Binance which would then be credited 1:1 to FDUSD.
FDUSD will be swapped into USDT. As can be seen from the screenshot below, there is enough liquidity on this market to support our swap size without much slippage.
Note: FDUSD trades close to 1:1 with relatively deep liquidity. In the actual implementation, we will set a minimum acceptable price (e.g., -0.2% to ensure users get reasonable conversion rates.
After the swap is completed, USDT will be witdrawn from Binance and deploy into the AF2.0 lending contract.
Users can then claim their ibUSDT anytime.
Voting:
This AIP will be conducted in a series of votes. The first vote will be a single-choice voting.
A YES vote would implement the conversion as proposed
A NO vote would keep the BUSD deposits as is
If a YES vote passed, there will be a subsequent vote on whether to charge fees on the transaction.
Resolution:
The community voted to implement the conversion as proposed.
References:
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