This proposal is based on a similar recent proposal in the MoC protocol which removed leveraged tokens. This led to a successful vote and this is now also proposed for the RIF on Chain (RoC) protocol - the main difference being that the high leveraged tokens in the RoC protocol are called “RIFX” tokens.
It is proposed to remove from the RoC model the positions with leverage greater than 2, called RIFx in the protocol.
Fundamentals
Initially, the protocol was conceived with leveraged positions, but this required the limitation that all RDOCs were redeemed in the settlement.
To do this, an exit queue was implemented where users who wished to redeem their RDOCs would enter them into that queue. When the settlement arrived, they would be redeemed and sent to their owners.
This, as is evident, would introduce an average delay in redemption of 15 days.
To mitigate this problem, a secondary market for RDOC-RIF had to be created. For this reason, a decentralized exchange was developed.
Finally, in response to the community’s desire, the mentioned queue was eliminated and the protocol was enabled to redeem the RDOCs immediately.
This caused an asymmetry in the model that is detrimental to it.
In addition, the leveraged positions introduced an important complexity to the model by adding a dimension, which is added to others such as the multipeg and eventually multi collateral.
This great complexity is inconvenient from the point of view of the purity of the model, which should not have embedded financial characteristics.
These features can and should be built into a layer outside and above the protocol.
Implementation
The implementation of this modification is very simple. A change must be made to the contract that inhibits the creation of leveraged positions. It can be done at any time after which new RIFx cannot be imposed. The RIFx that were valid at that moment will remain so until they are redeemed, which will happen at the latest in the next settlement.
Call to MOC holders: