Summary
This proposal seeks to engage and establish a strategic partnership between Iris and Demex. We propose to launch $IRIS on Demex and Nitron, to provide yield opportunities for IRIS holders and the greater ecosystem. By listing IRIS on Nitron, IRIS holders are able to earn lending APY and unlock capital on their HODLed assets, to borrow other assets. By doing so, we can boost the utility, buying pressure, and adoption of the IRIS token, and provide more opportunities for the Iris community to earn yield.
The Proposal
To list IRIS on Nitron, we propose boosting the launch with a) an incentive program or b) co-marketing efforts between Demex and Iris’ community to spread awareness.
We propose to seek 500,000 IRIS tokens (~$10,000) from the community pool. This amount is 0.2% of the community pool and will be used as incentives for a period of 3 months. The entirety of this amount will be used only to reward lenders of the IRIS pool.
The goal is to use these incentives to attract more liquidity to the IRIS lending pool, which will also help raise awareness of IRIS being able to be used as collateral. Currently, IRIS is not available as collateral on any money market and hence does not give their holders capital efficiency.
Furthermore, it will encourage users to lend out their IRIS tokens instead of selling it, when they are in need of liquidity. This will help maintain the market cap of IRIS by increasing its utility and reducing its selling pressure.
Users who view the IRIS ecosystem as undervalued and are of bullish sentiment can also deposit IRIS tokens, borrow stablecoins to obtain more IRIS, and repeat to achieve a leverage-long position on IRIS.
Additional details:
- As both chains are IBC-enabled, we can set up a relayer between Iris and Carbon, to process IBC transfers seamlessly so that users can deposit IRIS.
- Iris Net and Demex will jointly pursue co-marketing efforts to broadcast the launches.
- To prevent unfair farming of incentives during the incentivization period, borrowing IRIS will be disabled.
Distribution
If this governance proposal passes, we will proceed with the whitelisting of IRIS as collateral on the Nitron money market. The IRIS incentives will be distributed to the Switcheo team’s multi-sig. This IRIS incentive will then be deployed pro rata to users who deposit IRIS tokens in Nitron’s lending pool. The incentives can be used to incentivize the lending pools at a suggested time period of 3 months days, from the time of launch.
This proposal, if accepted, will send 500,000 IRIS tokens from Iris Network’s Community pool to a multi-signature address iaa18prnts34945g6ky9626fl2kcwn9qzvrjpmsn20 on Iris network in order to fund the external incentive module on Nitron according to the parameters of this proposal. The signatories are 3 doxxed members of the Switcheo team namely Ivan Poon, Ho Chang Jun, and Samyukta Narasimhan. Their LinkedIn profiles can be found in the reference link below.
In the future, Iris Network may want to launch similar programs with the Switcheo team with different parameters - any future program is outside of the scope of this governance action and will require a new proposal.
Consolidated reference links:
[https://docs.google.com/document/d/1St77B6gykRFiuxOfAKouhvZyOfd10LyjZmi0CnJlFNA]
IRIS Collateral Money Market Parameters
We propose the following parameters to ensure a safe and stable lending market based on IRIS’s liquidity, market cap, and other risk parameters.
IRIS
Loan-to-value (LTV): 20%
Liquidation threshold: 30%
Liquidation penalty: 20%
Supply cap: 1,690,000 IRIS tokens (approximately $40,000 can be raised anytime)
Borrow cap: 0 (will not be borrowable when incentives are live to prevent looping)
Optimal utilization: 50%
Target borrow rate: 0% (NA)
Projections
Example: Iris Net is able to incentivize the lending pool with $10,000 worth of IRIS for a period of 90 days.
If the incentive amount attracts around $100,000 of IRIS, it would give an incentive APR of about ~40% which is competitive in the current yield farming landscape.
If a user wants to earn even more yield, a user can mint USC or borrow other assets to subsequently obtain more IRIS and further deposit it to Nitron to earn more APY.
What is Demex?
Demex (https://app.dem.exchange/) is a powerful cross-chain perpetuals DEX powered by Carbon and is designed to support any type of financial asset imaginable. Demex aims to make finance accessible and trust-optional while providing an intuitive and familiar user experience.
Nitron is the name of Demex’s lending and borrowing money market. It works similarly to AAVE and supports a wide range of networks and assets. It also has a public liquidation platform, which allows anyone to perform permissionless liquidations on undercollateralized loans via the UI.
Demex exists on Carbon Network, a DeFi-focused L1 Cosmos Network built with Cosmos SDK and is IBC-enabled. The team behind Carbon Network is called Switcheo Labs, a doxxed Singapore Web3 development studio founded in 2018.
Why Demex?
Demex was the first central limit order book DEX that first launched in 2021 in the Cosmos ecosystem. Demex has a number of popular spot and perpetual markets for a range of top IBC tokens such as ATOM, OSMO, EVMOS, KUJI, etc., becoming a haven for Cosmos traders. It is also home to assets from other popular chains such as Ethereum, Arbitrum, BSC, and so on.
Moreover, Demex provides a supreme DeFi trading experience with its one-of-a-kind features such as flexible network fees, stablecoin auto-conversion, permissionless market and LP creation, and more.
This makes Demex a good platform to list IRIS on, to provide exposure not only to other Cosmos traders and DeFi enthusiasts but other major EVM ecosystems.
Why Nitron Money Market?
Nitron is the most extensive cross-chain money market in Cosmos. It is home to a number of Cosmos assets, exotic assets such as LSDs, and even liquidity pool (LP) tokens.
Nitron has been successful in attracting millions in TVL with its regular listings, as users find it the perfect platform to lend and collateralize their assets to unlock their capital and borrow other assets and/or mint stablecoins.
Nitron is already home to a number of IBC assets from Cosmos Hub, Evmos, Stride, and so on. We can confidently and easily list IRIS from Iris Net as well.
Conclusion
Iris Network and Demex have a shared goal of advancing DeFi in the Cosmos ecosystem. By partnering with Demex, we can increase DeFi activity and broaden the scope of lending, and collateralizing on this advanced DeFi hub. Additionally, we expect that launching on Demex will encourage more trading and bring greater adoption to the Iris community at large.