SUMA

Demo

The Problem

Users who are lending tend to want to lock in high interest rates, or at least do not want to see their interest rates fall.

<p>Conversely, borrowers want certainty over their interest rates.</p>
<p>The easiest way to do this is to set fixed rate, fixed term loans, but these are rigid and fail to give users the full flexibility of DeFi.</p>

Introducing SUMA - Secure with UMA

<p>We are introducing the proposal to create SUMA assets - assets powered by UMA Protocol that track the real value of lending &amp; borrowing rates for all DeFi platforms</p>

Why is this Important

SUMA assets provide exposure to the interest rate directly on various DeFi products.

<h3>Scenario 1</h3>
<p>A user coming from CeFi to DeFi wants to place her funds in a secure, interest-bearing "checking account" with full flexibility on withdrawal. She wants to maximize return while keeping flexibility</p>
<p>She visits dYdX or Compound and sees interest rates for USDC, her preferred stablecoin, at nearly 10%! She doesn't know if they will stay that way though.</p>
<p>She then allocates a small percentage of her portfolio to hedge against the risk of the interest rate moving against her</p>

Additional Scenarios to be added soon!

Mechanics

All SUMA assets in v1 will be valued according to the following formula:

            <p style="padding-left: 2.5%"><i>Price = 100 - leverage ( interest rate in % )</i></p>

Thus, users can choose how much to long or short this asset to cover their portfolio needs. In scenario 1 described above, the user may decide to go create a UMA token (or use an existing one) and sell/short the token for the interest rate of her desired product and term-length, thus giving her insurance incase the interest rate decreases for her DeFi.

    Key benefits
  • No fixed term length on insurance - user can sell value at any time
  • User can purchase at any time/get hedged/more safe interest rates
  • Can be used as a signal/tool for interest rate governance

Conclusion

DeFi is not easy to get into, or build on, starting from scratch. Using Torus, ENS, and UMA, we built something to allow users to go from zero (just a gmail) to crypt0.

Next Steps

  • Add an easy way to claim all the free subdomains for an email (check if price is free) automatically
  • Interest Rate Spread/ Brent/WTI-style Strategies
  • Building onchain price feed for UMA
  • Utilize this ENS address I bought as an easy to find and fund faucet: ethboston.wantsome.eth

Improvements

  • Integrate Torus with more dApps
  • Add more custom styling/location features on Torus interface/add a widget to drop in
  • Added functionality on UMA TokenBuilder to allow for UMA Token Search
  • Launching compatibility for more testnets for UMA, ENS.
  • Encorporate cDAI/cTokens directly into UMA (support for more than just DAI as collateral)
  • create a TCR for price feeds/repository of useful price feed sources for UMA

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