Mhairi
March 2, 2022, 12:49pm
1
This UMIP will add rDAI (redeemable Dai) to the supported collateral currencies to the AddressWhitelist contract, allowing UMA users to mint synthetics using rDAI as the collateral currency. This UMIP will also add a flat final fee to charge per-request. The proposed final fee is 400 rDAI per request.
## Headers
| UMIP-17 | |
|------------|------------------------------------------------------------------------------------------------------------------------------------------|
| UMIP Title | Add rDAI as a collateral currency |
| Authors | Jeff Bennett (endymionjkb@gmail.com), Sean Brown (@smb2796) |
| Status | Approved |
| Created | September 25, 2020 |
## Summary (2-5 sentences)
This UMIP will add rDAI (redeemable Dai) to the supported collateral currencies to the AddressWhitelist contract, allowing UMA users to mint synthetics using rDAI as the collateral currency. This UMIP will also add a flat final fee to charge per-request. The proposed final fee is 400 rDAI per request.
## Motivation
One of the most basic use cases for synthetic tokens is derivitives tied to underlying real-world assets, including equities - and a popular way to gain exposure to equities is through ETFs or index funds: baskets of securities chosen according to a published set of criteria.
Increasingly, and particularly among millennials, those criteria involve moral judgments and values. "Value driven investment" funds (e.g., the ETHO Climate Leadership Index) represent a rapidly rising trend in the industry, and often outperform the broader market.
An UMA synthetic tied to an "ESG" index would be a great way to "long the environment." But an even greater way would be to use rDAI as collateral for the index position, designating an environmental charity (e.g., Offsetra or rTrees) as the beneficiary. That way, the charity always benefits, even if the index underperforms. (Perhaps especially then, if position holder needs to deposit more rDAI to avoid liquidation.)
Of course, this idea can be generalized beyond ESG, to any pairing of a charitable cause to a related ETF or index fund. And since new charities are partnering with rDAI all the time - in fact, through the rDAI protocol anyone can create an arbitrary "charity" simply by providing a list of ETH addresses and weights - this is a growth industry.
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