Stability Fund Cap: IUSDC

The Stability fund itself has proven to be a great success so far. So much so, that the IUSDC balance in the stability fund has hit its cap of ~2M tokens (stability fund is top holder cxa09…) USDS still is far from its cap, so anybody with an account on could do the following arbitrage to keep the peg:

1.) USDS → bnUSD through stability fund (0.5% fee)
2.) bnUSD → ICX through Balanced DEX (1.3% fee)
3.) ICX → BTC on centralized exchange (~0.1% fee)
4.) Withdraw BTC to (need KYCed account)
5.) BTC → USDS on (not sure fees, but spread is probably at least 1%)

This full-circle arb costs ~3-4% and could take a decent amount of time, especially if starting with USD as cash. There’s also risk of holding the BTC, as Stably doesn’t immediately credit you. I looked into trading USDC on Stably and I saw a deposit option for Stellar-based USDC, not sure what exchanges support that though.

For next steps, I’d say the DAO has a few options worth considering:

1.) Raise the IUSDC cap


  • More stability for bnUSD


  • More risk associated with Orbit Bridge
  • More risk associated with USDC as a stablecoin

2.) Do nothing, rely on USDS for now


  • No added risk outside of what was already approved


  • Need to rely more on USDS traders for bnUSD stability for the time being

3.) Add a new stablecoin when ICON Bridge launches (similar to option 2, still pretty much waiting for now)


  • Adds more risk, but it’s diversified to a new stablecoin and/or new bridge


  • Need to wait for ICON Bridge to launch and the Nexus/Balanced interface to support it, which is a bit of an unknown from Balanced’s perspective

Overall I’m open to suggestions on next steps and am curious what others have to say. I’d lean toward a vote to raise the cap to ~2.5M, then hopefully by the time that cap is hit we’ll be able to move forward with option 3.


Definitely agreed, move to increase iusdc cap. Dont think the risks are a cause for concern and the benefits outweigh the risks. usdc is imo the best stablecoin out there atm. The orbit bridge risk is there but going by Cyrus ama, ethereum integration is in the works and since bsc is already integrated dont think it will take too long to integrate eth. So icon bridge will be another option soon to bring over usdc…


I like option 3. I also think an interesting alternative is creating a basket or index of all of the stables on the network and include bnUSD in it. I know that entails some technical work from the dev team but i would hope they are working towards multi-asset pools anyway.


I don’t think would be issue with increasing the IUSDC cap.

Is there a transition plan for IUSDC <> whatever the Bridged USDC will be. Will that just be adding that new USDC and not increasing the IUSDC cap. Or I guess we can also lower the fee on that trade to make it empty out over time?
Do we NEED to incentivise transitioning?


I would also choose for option 3 in combination with option 1. A cap increase from 2M → 2.5M should be fine as long as we diversify once ICON bridge launches.


1 and 3 IMO.

I assume that bUSD is a quality stablecoin. Does Harmony has a good Stablecoin? So cool to be able to use ICON Bridge BTW.

1 Like

Initiate a bot that will align parity 1:1 USDC/BNUSD pool which will use USDC of the Stability Fund

hmm i think right now IUSDC is worth less than bnUSD, so it would actually require putting more IUSDC into the fund to get bnUSD, then trade that bnUSD for IUSDC. Perhaps I am misunderstanding.

Also thank you all for the feedback. I’ll wait a bit longer but leaning toward submitting a vote to raise IUSDC cap to 2.5M. If anybody else wants to take that action, could submit a text proposal for now. Feel free to do so

1 and 3 make the most sense to me.

As ICON Bridge won’t be audited until after its release, we should start with a much tighter cap to limit the risk. Perhaps around 250K?

1 Like

Shall we move ahead with a normal duration vote? bnUSD peg is not under any pressure atm, but I think we should try not to use short duration votes any more than neccessary.


Agreed, if prices collapses I guess we could add an emergency vote.

Sounds good guys - will get that going