YPP-0066.md

Proposal

Lower the dust levels

Background

The dust (min debt) level for USDC and DAI borrowing is set to 5000 (USD VALUE) currently, which now too high to incentivize smaller vaults. Liquidating a vault costs $20 USD at 13 Gwei.

Details

The updateDust.ts script will be used, with this input:

/// @notice Minimum debt limits
/// @param base identifier (bytes6 tag)
/// @param collateral identifier (bytes6 tag)
/// @param minimum vault debt, modified by decimals
export const newDebtMin: Array<[string, string, number]> = [
  [DAI, ETH, 1000],     // Value in DAI
  [DAI, USDC, 1000],    // Value in DAI
  [DAI, WBTC, 1000],    // Value in DAI
  [DAI, LINK, 1000],    // Value in DAI
  [DAI, FRAX, 1000],    // Value in DAI
  [DAI, UNI, 1000],     // Value in DAI
  [DAI, WSTETH, 1000],  // Value in DAI
  [DAI, ENS, 1000],     // Value in DAI
  [USDC, ETH, 1000],    // Value in USDC
  [USDC, DAI, 1000],    // Value in USDC
  [USDC, WBTC, 1000],   // Value in USDC
  [USDC, LINK, 1000],   // Value in USDC
  [USDC, FRAX, 1000],   // Value in USDC
  [USDC, UNI, 1000],    // Value in USDC
  [USDC, WSTETH, 1000], // Value in USDC
  [USDC, ENS, 1000],    // Value in USDC
  [ETH, USDC, 1],       // Value in ETH
  [ETH, DAI, 1],        // Value in ETH
  [ETH, WBTC, 1],       // Value in ETH
  [ETH, LINK, 1],       // Value in ETH
  [ETH, FRAX, 1],       // Value in ETH
  [ETH, UNI, 1],        // Value in ETH
  [ETH, WSTETH, 1],     // Value in ETH
  [ETH, ENS, 1],        // Value in ETH
]

/// @notice Minimum debt limits to be used in an auction
/// @param collateral identifier (bytes6 tag)
/// @param Minimum debt, modified by decimals
export const newAuctionMin: Array<[string, number]> = [
  [ETH, 1000000],    // Value in terawei (ETH*10**-6) 
  [DAI, 1000],       // Value in DAI
  [USDC, 1000],      // Value in USDC
  [WBTC, 500],       // Value in WBTC basis points (WBTC*10**-4)
  [WSTETH, 1000000], // Value in terawei (ETH*10**-6)
  [LINK, 138],       // Value in LINK
  [ENS, 64],         // Value in ENS
  [UNI, 153],        // Value in UNI
  [FRAX, 1000],      // Value in FRAX
]

Testing

The change has been tested on a mainnet fork and a Tenderly fork by running updateDust.ts first, followed by updateDust.test.ts to verify that the changes were made.

 ~/dev/yield/environments-v2   increase-dust ● ? ⍟12  bash scripts/governance/update/updateDust/updateDust.sh
++ dirname scripts/governance/update/updateDust/updateDust.sh
+ HERE=scripts/governance/update/updateDust
+ export CONF=/Users/devtooligan/dev/yield/environments-v2/scripts/governance/update/updateDust/updateDust.config
+ CONF=/Users/devtooligan/dev/yield/environments-v2/scripts/governance/update/updateDust/updateDust.config
+ RUN='npx hardhat run --network tenderly'
+ npx hardhat run --network tenderly scripts/governance/update/updateDust/updateDust.test.ts
Impersonating 0xfe90d993367bc93D171A5ED88ab460759DE2bED6 on Tenderly

Post deployment state testing
=============================

Debt Limits (dust)
Success! DAI/ETH set to: 1000
Success! DAI/USDC set to: 1000
Success! DAI/WBTC set to: 1000
Success! DAI/LINK set to: 1000
Success! DAI/FRAX set to: 1000
Success! DAI/UNI set to: 1000
Success! DAI/WSTETH set to: 1000
Success! DAI/ENS set to: 1000
Success! USDC/ETH set to: 1000
Success! USDC/DAI set to: 1000
Success! USDC/WBTC set to: 1000
Success! USDC/LINK set to: 1000
Success! USDC/FRAX set to: 1000
Success! USDC/UNI set to: 1000
Success! USDC/WSTETH set to: 1000
Success! USDC/ENS set to: 1000
Success! ETH/USDC set to: 1
Success! ETH/DAI set to: 1
Success! ETH/WBTC set to: 1
Success! ETH/LINK set to: 1
Success! ETH/FRAX set to: 1
Success! ETH/UNI set to: 1
Success! ETH/WSTETH set to: 1
Success! ETH/ENS set to: 1

Auction Limits (dust)
Success! ETH set to: 1000000
Success! DAI set to: 1000
Success! USDC set to: 1000
Success! WBTC set to: 500
Success! WSTETH set to: 1000000
Success! LINK set to: 138
Success! ENS set to: 64
Success! UNI set to: 153
Success! FRAX set to: 1000