Chainscope

Season 2 is off to a flying start and liquidity providers are eating gud! For the first time ever you can now also use $USDC and $USDT to earn $PRYZM.

Hi everyone, We made some good progress in the execution deleveraging plan: Yesterday, we repaid the ~44.5k ATOM debt (~$220k) of the ATOM/KUJI LP in full; ATOM depositors on Ghost can now withdraw from the lending vault freely. A few days earlier, we also repaid 334.4k USK from the USK margin exploit, which allowed us to recover ~57.63 wETH of collateral, which we sold for ~152.4k USDC via a limit order. The remaining USK margin exploit debt stands at 408.6k USK, which we will repay using some of the 481k USK we have left in the USDC/USK LP. There is no urgency on that, this will be one of the last things we will do as part of the USK wind down process before transitioning the L1 to low-power mode. We will also be able to recover ~80k USDC from the “rounding surplus” in the KUJI/USDC FIN pair (FIN fair execution algorithm means that, for a given price, everyone is filled at the exact same price in the exact same proportion. This means that every time orders are filled, there is some dust due to rounding that cannot be distributed and accumulate in the FIN contract). We will use those funds to further delever without reducing liquidity. With the above, we will have ~657k USDC and 281k USK in the treasury + another ~75k USK available in the USDC/USK LP, net of the remaining USK margin exploit debt. The only other remaining debt item to repay is the ~875k USDC debt from the KUJI/USDC levered LP. We currently have enough stables to repay, but there is still a mismatched between assets and liabilities denominations: we need to convert another ~281k USK for USDC, but this takes time due to the imbalanced in the USK/USDC LP. We want to repay the USDC debt in full in one go, like we did for all the other positions, for security reason: if we do a partial repayment only, then there is the risk that someone with enough KUJI manipulates the price to the downside till we get to liquidation level, triggering another liquidation cascade. The position is safe from that for as long as LTV is >100% (because in that scenario, it's not possible/profitable to liquidate). The USK/USDC imbalance is temporary: once Ghost will be live on THORChain and we start hiking the USK mint interest rate to incentivize people to migrate their loans to the new chain. Borrowers will have to borrow USDC to buy back USK to repay their CDPs and free up their collateral, and the pool will rebalance. We might do an OTC deal (USK<>USDC) to accelerate the execution of the deleveraging plan, we are looking at it. We will keep the community updated once there are any progresses on the remaining debt repayment front. Meantime, we are cooking on the technical implementation, things are becoming real and damn, what’s coming is exciting 🔥