Add ERC: Fractional Reserve Token #644
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Co-authored-by: Andrew B Coathup <[email protected]>
Co-authored-by: Andrew B Coathup <[email protected]>
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The html proofer (in the CI) does approve relative links, while the EIP walidator does not approve links that are not relative. is there anything i should do from my side? |
ERCS/erc-7770.md
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| eip: 7770 | ||
| title: Fractional Reserve Token | ||
| description: An interface for fractional reserve tokens. |
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Your description just restates your title. Use the description to elaborate on the ideas introduced in your title instead. Perhaps explain what a fractional reserve token is?
ERCS/erc-7770.md
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| ## Abstract | ||
| We propose a new token standard for synthetic assets that are only partially redeemable to their underlying asset, but fully backed by other collateral assets. | ||
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| The standard defines an interface to mint fractional reserve assets, and a standard to reflect economical risk related data to the token holders and lenders. |
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Should this be "economic" instead?
ERCS/erc-7770.md
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| This standard does not aim to dictate economic risk management practices, but rather to have a standard on how to reflect the risk to token holders. | ||
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| ## Specification | ||
| The proposed standard has the following requirements: |
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Proposals should be written as if they were already Final. Using "proposed" here would be weird once the standard is accepted.
ERCS/erc-7770.md
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| ``` | ||
| ### Reserve ratio | ||
| The reserve ratio reflects the ratio between the token that is available as cash, i.e., available for an immediate redemption (or alternatively, a token that was not minted via a fractional reserve minting), and the total supply of the token. Segregated accounts **MUST** be subtracted from the cash balance. | ||
| Lower reserve ratio gives rise to higher capital efficiency, however it increases the **likelihood** of depeg or a run on the bank, where token holders cannot immediately redeem their synthetic token. |
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This line feels more like rationale than specification?
ERCS/erc-7770.md
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| Increasing the total supply could be a concern if a token is used for DAO votes and/or if dividends are distributed to token holders. | ||
| In order to mitigate such concerns, segregated accounts are introduced, with the premise that money in these accounts is not counted towards the reserve, and therefore, additional token supply cannot be minted against them. |
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These points feel more like security considerations or rationale?
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There has been no activity on this issue for six months. It will be closed in 7 days if there is no new activity. If you would like to move this PR forward, please respond to any outstanding feedback or add a comment indicating that you have addressed all required feedback and are ready for a review. |
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@SamWilsn thanks for the comments, and sorry for the delayed reply. |
ERCS/erc-7770.md
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| At the core of the coordination relies the need to understand how much additional supply is available for borrow, and at what interest rate. The additional borrowable supply is deduced from the required reserve ratio, and the total, borrowable and segregated supply. | ||
| Lower reserve ratio gives rise to higher capital efficiency, however it increases the **likelihood** of depeg or a run on the bank, where token holders cannot immediately redeem their synthetic token. | ||
| Hence, the interest rate **SHOULD** be monotonically increasing with the current reserve ratio. |
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Requirements ("SHOULD") appear only in the Specification section. Instead, the rationale section should explain why those requirements exist.
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The commit cec3965 (as a parent of 3dbabf9) contains errors. |
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An interface for fractional reserve tokens.