AIP-29.3: Determining the conversion fees

THIS IS THE THIRD 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:

1. We will upgrade the deposit contract for the BUSD vault on AF1.0 to allow for admin withdrawal.

2. All withdrawn BUSD will be sent to Binance which would then be credited 1:1 to FDUSD.

3. 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.

1. After the swap is completed, USDT will be witdrawn from Binance and deploy into the AF2.0 lending contract.

2. Users can then claim their ibUSDT anytime.

Voting:

Voters will choose the % fees to charge for the conversion. The winning vote does not need to receive higher than 50% of the votes.

• 0.5%

• 1.0%

• 1.5%

• 2.0%

Resolution:

• The community voted to charge 2% conversion fees.

References:

• Snapshot Voting

• Forum Thread