SIP-348: Enable USDC for Andromeda on Base

Author	Cavalier
Status	Draft
Type	Governance
Network	Base
Implementor	TBD
Release	TBD
Created	2023-10-27

Simple Summary

Configure the Andromeda Base V3 deployment to accept USDC collateral, and enable ETH and BTC markets on Perps V3.

Abstract

This SIP proposes to configure the Andromeda Base V3 deployment such that it accepts USDC collateral. Additionally, ETH and BTC markets will be enabled on Perps V3. Focussing on USDC collateral limits the complexity of the deployment, reduces risk and increases alignment with the Base network.

Motivation

Andromeda combines V3 Core, Perps V3, USDC, and ETH collateral. Andromeda on Base does not support ETH as collateral. This change is proposed to cautiously test and scale the appetite for USDC first, before integrating ETH as collateral.

Specification

Overview

This SIP will define the Andromeda Base V3 deployment settings to accept USDC as collateral for LPing, and margin for trading Perps. It will also activate ETH and BTC markets on Perps V3 with conservative configurations. A USDC wrapper (to sUSDC for internal accounting) will be implemented so that both LPs and perp traders only have to think about USDC. The SIP aims to treat USDC as a constant valued at $1 and to use a spot market wrapper to produce the 1:1 redeemable synth sUSDC for Perps trading.

Rationale

The introduction of USDC as collateral, with a constant value, provides an opportunity to test the market's appetite in a controlled manner before adding more complex assets like ETH. By using a spot market wrapper, a 1:1 redeemable synth, sUSDC, will facilitate Perps trading. The initial limitation to $1m of LP collateral, and the disabling of minting is a conscious decision to enhance the liquidity available to the Perps Market.

Technical Specification

Configure the Base deployment Require Markets to have 125% collateralization, and require at least 1 days before being able to withdraw collateral

minimum_liquidity_ratio = 125%
account_timeout_withdraw = 1 day

Enable USDC as collateral, at a fixed price of $1, and maximum of $1m

usdc_address = 0x833589fCD6eDb6E08f4c7C32D4f71b54bdA02913
registerNode = CONSTANT NODE, 1
synthUsdcMaxMarketCollateral = 1000000

Disable minting, and set liquidation at 101%

issuanceRatioD18 = MaxUint256
liquidationRatioD18 = 1.01

Configure ETH and BTC Perps Markets:

Variable	ETH Market	BTC Market
PerpsMarketId	100	200
SkewScale	1000000	1000000
MaxFundingVelocity	9	9
MakerFeeRatio	0.0002	0.0007
TakerFeeRatio	0.0005	0.0003
MaxMarketSize	100000	100000
InitialMarginRatio	1	1
MaintenanceMarginScalar	0.5	0.5
MinimumInitialMarginRatio	0.02	0.02
LiquidationRewardRatioD18	0.01	0.01
MaxLiquidationLimitAccumulationMultiplier	1	0.5
MaxSecondsInLiquidationWindow	30	30
MinimumPositionMargin	0	0
LockedOiRatio	0.5	0.5
SynthMaxCollateralAmount	<%= MaxUint256 %>	<%= MaxUint256 %>
MaxLiquidationPd	0.0016	0.0016

Test Cases

Test cases will be provided with the implementation to ensure that the Andromeda Base V3 deployment correctly accepts USDC and that ETH and BTC markets operate as expected on Perps V3.

Configurable Values (Via SCCP)

All variables of the deployed V3 system.