V1 Winddown Part 3. Tighten new asset constraints


The vast majority of capital has migrated to the v2 lending protocol which offers support for the complete set of v1 protocol functionality as well as a number of additional features and the modularity to expand going forward.

With this it is prudent to take actions to continue winding down the use of the v1 protocol to free up developer resources to focus fully on the v2 protocol. While this is occurring on its own there are several simple steps the DAO can take to ensure this migration continues.

These are limiting future borrows as well as limiting additional capital from being added as collateral in the v1 protocol.


All items are to be executed at the conclusion of the current Algorand governance period (5) in order to give those currently using the v1 vault an opportunity to migrate to the v2 protocol without forfeiting governance rewards.

  1. Cap borrowing in the ALGO, USDC, goBTC and goETH markets. Meaning no additional borrowing beyond the current levels will be permitted. Borrow positions will continue to grow through interest but otherwise will strictly decrease.
  2. Cap borrowing in the STBL market at 25% above the current borrow at the time of this action
  3. Cap supply in the STBL market at 25% above the current supply at the time of this action

I am not understanding why capping borrowing ALGO or USDC is useful. I can understand with BTC and ETH volatility that maybe capping them would be a safe move, but why ALGO or USDC?

just on V1 to incentivize people migrating their liquidity to V2

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Oh, ok. I see. By reading it, I thought it was unclear whether the cap in borrowing was v1 only, or throughout the whole thing.

Thanks for the input will make sure that is very clear in the final proposal

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How does this get promoted to a final proposal? It seems ready.