[0IP-5] List jEUR as a non-collateralizable asset

Proposal:

The protocol proposes to list jEUR as a non-collateralizable asset on 0VIX.

This comprises of the following vote:

  • Whether to list jEUR on 0VIX Protocol as a non-collateralizable asset

Motivation:

Jarvis Network’s jFIAT product suite has pioneered the issuance and exchange of synthetic fiat currencies with a keen eye on capital efficiency and security. jFIATs are over-collateralized with USDC and can be converted back and forth for their collateral at the Chainlink price feed, and without price impact. This convertibility allows jFIATs to keep their peg and to be as liquid as USDC.

The Euro is the second-largest reserve currency as well as the second-most traded currency in the world after the US-Dollar. DeFi users need to swap from their local currency in order to participate, which exposes them to exchange costs and the risks of the dollar. In the past year, that served many users well, so there’s also interest in shorting the Euro token.

Looking at Aave – jEUR has a utilization rate of 47.74% (Supplied $1.15M Borrowed $548.35K); therefore, you can safely assume that there is demand for the asset.

Details:

The protocol wants to start as safely as possible, so it is not allowed jEUR to be used as collateral.

Therefore, LTV: 0%

Simultaneously, the protocol explores the possibility of using it as collateral since jEUR keeps its peg, and there is no slippage when buying/selling it on the primary market due to its mint/burn mechanics.

jEUR has no Chainlink price feed, but it uses the EUR/USD price feed of Chainlink.

V1 of the protocol has been audited by Halborn, Ubik and Zellic: Audits - Jarvis Network - Synthereum 1, and V2 has been audited by Zellic: Audit - Jarvis Network - Synthereum 2

Why jEUR?

  • The main feature of jFIATs is their convertibility for their collateral (USDC, more assets to be added) and for other jFIATs at the oracle price, without price impact, allowing for zero slippage on-chain Forex. Because one can exchange them for USDC at any time, they maintain their peg, have the same market depth as USDC, and are consequently liquid.
  • Using Paraswap, you can swap jEUR for any other token.
  • Using Stableswap.fi, you can swap jEUR for many other non-Jarvis stablecoins.
  • They have teamed up with Mt Pelerin, a Swiss-registered company, to offer customers a free 1:1 fiat on- and off-ramp accessible through Polygon. Anyone can switch back and forth between their Polygon jEUR account and their Euro bank account. Using jEUR, one may even pay invoices in euros (Jarvis.Network has used jEUR to pay invoices, salaries, rent, and even taxes, since last July).
  • They also have teamed up with Monerium, an authorized and regulated electronic money company, to offer an indirect and free 1:1 (sometimes with a bonus!) on- and off-ramp. Anyone can buy EURe from Monerium, and either swap it for jEUR at the EURe/jEUR price on Curve (possible positive slippage) or wrap it into jEUR at a 1:1 ratio if the price on Curve is less interesting.
  • Together with Paraswap, these partnerships give users a method to purchase any token on Polygon with Euros at a lower cost than on most CEXs.
  • A direct bridge between banks and a “Euro saving account” on the Blockchain can be built using jEUR’s cheap and direct fiat on and off-ramp. Numerous businesses are seeking a way to save money on the blockchain without taking on the risks associated with yield farming programs. This use case would be feasible if jEUR was listed on 0VIX.
  • Additionally, users would be able to borrow jEUR against a variety of collateral and convert it to euros.
  • jEUR can be wrapped into jXAF or jXOF for the African market. The jEUR Team is working on abstracting jEUR for end-users (you might deposit jXAF into 0VIX and receive interest on top of it; in reality, 0vix would unwrap the jXAF for jEUR, but the end-user won’t see it). Any integration of jEUR is, therefore, accessible to jXAF/jXOF holders.
  • jEUR can be used for payments: on-chain with Superfluid and Request, and off-chain using Mt Pelerin or Monerium (through EURe).
  • It would be the ideal asset to borrow to arbitrage on Polygon because jEUR is convertible for USDC at the Chainlink price feed and is used by other Euro stablecoins to maintain their peg and access greater liquidity.
  • To maintain low-interest rates, the DAO may mint uncollateralized jEUR and deposit them straight into 0VIX using the direct deposit module for jEUR.
  • The protocol is very capital efficient and does not require a high TVL. 625k of USDC has been enabled for one year on Polygon:
    • 3.5M jEUR in circulation ($4M)
    • $250M of volume on their primary market
    • 135k swaps by 11.5k users
    • $60M of transfers (wallet-to-wallet, excluding swaps)
    • $175M on secondary markets (Curve, Kyber)
    • $25M of fiat on- and off-ramp by 2k users
    • 8k on- and off-ramp transactions
    • 20k cumulative holders with 1.4k jEUR current holders (most jEUR are into liquidity pools, which count as 1 user).

More info on the project:

There is currently no DAO, only a community-owned multisig (5/8) managing the treasury and two company-owned multisig (2/3), one admin, and one maintainer (the admin can only add or revoke a maintainer). The maintainer can upgrade some parts of the protocol (minting and burning fees, adding/removing a new jFIAT, adding/removing supported collateral, calling the emergency shutdown function, and changing the price feed) but does not have any access/control over any funds.

Token permissions minting and upgradability:

The only things that can be upgraded are the minting/burning fees and the addresses receiving these fees; adding new jFIAT; adding a new type of collateral; deploying new liquidity pools; calling the emergency shutdown function (settle all the jFIAT at the Chainlink price feed); changing the price feed.

Links

Voting period:

  • 2 days

Vote options:

Should we list jEUR on 0VIX as a non-collateralizable asset?
  • Accept the proposal: Yes
  • Needs more discussion

0 voters

Result eligibility:

Given a positive vote, this proposal will be executed, pending also a positive vote on the Jarvis community on seeding the jEUR market. This is due to end by Sunday 27-11-2022.

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