Hi 1INCH holders,
This is a proposal for adding borrow/lend support for xINCH on Aave.
As one of benefits for Aave, Anton highlighted:
Aave platform could stake 1INCH tokens in st1INCH, same way as stored DAI inside CHAI a while ago. This would allow to have additional earnings for liquidity providers.
- Get a new Aave proposal submitted to Aave using the most recent governance process.
- Instead of $1INCH, let’s put forward a proposal for $xINCHa and $xINCHb. These are tokenised $st1INCH tokens that are transferable with automatically compounding & reinvesting staking rewards. This was launched by XToken.Market (see the announcement).
- Increased utility and adoption of $1INCH
- $xINCH will serve as a high-quality collateral in Aave that can be borrowed against
- It’s unlikely that people will be borrowing $xINCH to short $1INCH as xINCH isn’t as liquid (altho xtoken.market has started liquidity programmes). See example of xSUSHI on Aave - it generates 0% interest as no one is borrowing it, but the Sushi community can now deposit their staked Sushi and borrow against it: win-win. (Note xSUSHI wasn’t done by xtoken.market)
- More interest in xINCH → potentially more $1INCH gets staked → lower free-float supply → higher token price
- Alignment with Aave community
- We need support from 1INCH core team to get legitimacy and momentum to such a proposal. Ideally, it would be great for @k06a to resubmit the updated proposal.
- Once done, all 1INCH community have to vote and push for this to happen!
I’m in touch with both X-Token and Blockchain Labs teams (who did the audit of xINCH), so we could support the application by providing all necessary info.