Proposal: Add TUSD as a Collateral Asset

Hello Compound community, this is Joyce from the TrueUSD (TUSD) team!

The previous proposal TUSD posted on February 10 received a lot of feedback and suggestions from the community. It is nice to hear your feedback and learn about your concerns regarding the previous proposal. It also prompted us to take further measures to make up for potential risks and improve the overall process. We believe the opportunity to speak and work with Compound contributors was a valuable experience for the TUSD team to communicate with Compound and further our discussion to the next level.

The TUSD team fully respects community opinions and here’s the summary of our current progress:

  1. Regarding the contract risk, TUSD team worked together with @cylon from OpenZeppelin and the bug behind the cToken Refactor issue was fixed at its source. The patch was successfully deployed on February 23, 2022 with detailed information here:“Compound-TUSD Integration Issue Retrospective
  2. Many thanks to @pauljlei from the Gauntlet team, who provided a comprehensive market risk analysis with the conclusion that “from a market risk perspective, it is safe to enable TUSD as collateral.”

Regarding the upcoming proposal details, we would like to follow @pauljlei 's suggestions on “creating two separate proposals to decouple the proposal to enable TUSD as collateral from the COMP emissions piece” and hereby propose to add TUSD as a collateral asset on Compound.

Proposal details

We propose to add TUSD as a collateral asset on Compound. TUSD has proven its security and performance as a collateral asset on several other lending platforms with healthy utilization rates; for example TUSD is listed on AAVE V2 market with a collateral factor of 80%, with the following other protocol statistics:

Collateral Locked 106.73M
Collateral Usage 60.39M
Utilization Rate 56%
Value at Risk 0M
Liquidations at Risk 0M

For reference convenience, TUSD’s collateral factor (or LTV) on AAVE is 80%, 80% on Venus, and 75% on JustLend As such, we propose to have TUSD’s collateral factor on Compound be set as 75%.

To summarize, TrueUSD would like to propose the following updates:

Add TUSD as a collateral asset with a collateral factor of 75%

We appreciate the support from the Compound community, and thank you for considering our proposal! We hope to hear from you soon, and we are available to provide any additional support or resources that the community may need.

Best regards,