Simple Summary

This SCCP proposes to increase the minting fee (issueFeeRate) on new ETH backed loans to 2% contract (0x5c8344bcdC38F1aB5EB5C1d4a35DdEeA522B5DfA).

Abstract

Setting the minting fee at 2% will effectively raise the cost of minting new sUSD and sETH with ETH as a collateral, no change in fees on closing loans or repaying existing loans.

Motivation

The primary motivation is to control the supply of synths in expectation of ramping up the cap of the wrappr and a significant reduction on mintFeeRate. Increasing minting fee on ETH backed loans will allow us to implement SCCP-99 and allow participants to continue to open up new short positions without opening up a gap that allows arbitragers to front-run the wrapper paramater update. That said, the minting fee on ETH backed loans will be reduced back to the original fee of 10 bp, once wrappr is fully deployed.

Copyright and related rights waived via CC0.