Proposal to Launch an enhanced version of the RIF on Chain Protocol

Dear Money on Chain and RIF on Chain communities,

As a representative of RootstockLabs, a pivotal supporter within the Rootstock ecosystem, I am thrilled to present a proposal for an enhanced iteration of the RIF on Chain protocol.

Developed in collaboration between mimLABS and RootstockLabs, this proposal for a new iteration of the RIF on Chain protocol brings forward a range of innovative features designed to enhance security measures and pave the way for reaching new milestones in the ecosystem.

Please find below an outline of the key features of this new RIF on Chain iteration as I eagerly await your feedback and support for this proposal.

1/ Protocol Efficiency - Reduction in gas fees

Reducing the RIF on Chain protocol fees is crucial for the community. It will make DeFi services more accessible to a wider range of users, including those with smaller budgets, thereby promoting financial inclusion. The reduced fees will also incentivize greater participation and usage of the protocol, fostering its growth and liquidity, and attracting more users and developers - ultimately leading to a more vibrant and sustainable community ecosystem.

To illustrate the significant improvement, below is a comparison of the fees between the current version and the new iteration of the protocol if approved by the community.

2/ Price Determination - enhanced support at ABI level

A new parameter is introduced to help protect users from price changes when they perform a mint or redeem transaction in the protocol. For example, if a user mints RIFPRO tokens, the improvement allows them to select how many RIFPRO they want to receive and the maximum RIF they expect to spend. If the operation results in more than the user-specified amount due to price movements, the transaction is reverted. This allows an improved degree of control over the price determination.

3/ Accessibility - Joint Issuance and Redemption

This new feature enables the issuance and redemption of USDRIF and RIFPRO tokens simultaneously. This innovative capability ensures seamless transactions, meticulously balancing the issuance and redemption amounts to preserve the global coverage of the RIF on Chain protocol, safeguarding its operability. To issue USDRIF or redeem RIFPRO, the global coverage of the system must be greater than the target coverage. This coverage is a parameter set to 5.5, dynamically adjusted by the relationship between the RIF token spot price and its moving average price. In the rare case when the coverage ratio is below or close to hitting the 5.5 target coverage, thanks to these new operations the user would be able to mint USDRIF or redeem RIFPRO.

4/ Operational Efficiency - Swap Operations

The feature will enhance the RIF on Chain usability by combining 2 transactions into one and therefore allowing the user to save gas and protocol fees. For instance, the swap operation of exchanging RIFPRO for USDRIF is equivalent to redeeming an amount of RIFPRO and subsequently utilising that RIF to mint USDRIF. In the current version of the protocol (V1), users are required to execute two separate transactions and incur gas and protocol fees for each. With this enhancement, users only need to pay for a single transaction.

5/ Price Execution - “The Queue”

The transaction Queue is a mechanism that lifts the price Oracle demands to a high-frequency price to ensure enhanced protection of the protocol. In its essence, the transaction Queue is a smart contract that allows the collateral bag to queue orders for their execution after a certain period of time. When the user enters a transaction, it is sent to the queue. The user will be required to pay gas fee for the new queued transaction. Once the transaction enters the queue, cancellation is not permitted, and the funds become locked. The queued transaction could be executed by any address ensuring decentralisation. Once the execution starts, the queue sends blocks of queued transactions to the collateral bag for execution. The collateral bag will report 1 by 1 if it was successful or failed, and if it fails, the locked funds will be returned to the owner.

6/ Simplification & Optimisation

Removal of the RIFX token: RIFX are 2X+ leveraged positions, which were disabled following a decision of the RIF on Chain and Money on Chain community last year. However, part of the code remained in the protocol. In this proposed version, the RIFX feature will be removed from the code entirely to improve the purity of the model. In the future, such financial features should be built into a layer outside and above the protocol.

Simplified settlement functions: settlement functions in this new version of the protocol will be greatly simplified, thereby enhancing the smart contract size and optimisation.

Vendor integration usability: The Vendor feature gives the capability to protocols, wallets, and other platform providers to integrate with the RIF on Chain protocol to allow minting and redeeming of USDRIF through their interfaces. In the current protocol, the Vendors are required to stake MOC tokens to be able to integrate and have a limit on the markup fee they can charge. In this new iteration of the protocol, both the staking condition and the markup limits are removed.

The new RIF on Chain iteration will also introduce a new whitepaper detailing the protocol features and enhancements. The whitepaper will be made available in due course within this proposal discussion.

The RIF on Chain protocol has undergone a thorough independent evaluation of the protocol’s codebase and security measures by an independent Auditor. The primary goal was to identify any vulnerabilities and potential exploits. The Auditor evaluation has found only “low risk” and “no significant risk” issues. The full audit report will be posted in the technical proposal.

To further fortify the security of the new RIF on Chain protocol iteration, a Bug Bounty program will be launched upon a positive vote for this proposal. The Bounty program aims to serve as a proactive approach to bolstering the security of the protocol, to identify and promptly address any vulnerabilities that may arise, ensuring the continued robustness of the protocol.

I extend an invitation to all community members to engage in the discussion and voting of this proposal for the upgrade of the RIF on Chain protocol. Your input is fundamental to shaping the trajectory of the RIF on Chain protocol, and I deeply value your ongoing support.

Daniel Fogg

(with support from the amazing RootstockLabs & mimLABS teams)


:mega: Dear Money on Chain and RIF on Chain communities, here is the White Paper for RIF On Chain v2