Partnership Proposal with Ratio Finance (Including Treasury Swap)

Hi all.

Michael from Ratio Finance here. After discussions with some in the Saber community, we at Ratio are formally proposing a multi-faceted partnership proposal. The foundation of the partnership would rest on three pillars: Saber LP onboarding onto Ratio Finance, a treasury swap between our two protocols, and mutual marketing. Given that the SaberDAO ultimately decides on the treasury swap, that is what we will propose to the community on-chain given a positive response. The Saber LP collateral onboarding and marketing are commitments that Ratio is making to the community off-chain. We are in touch with leaders in the Saber community, and will orchestrate off-chain activities with them.

We believe this is a mutually beneficial partnership that will lead to the strengthening of both of our protocols. Find the details about Ratio Finance, the proposed partnership, and our shared vision below. Thanks in advance for your consideration.

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Partnership Proposal

Ratio Finance x Saber

# Overview

Ratio Finance is a Quantitative Risk Assessment Protocol built on Solana. Its first use case is a CDP for stable-stable LP tokens that are redeployed into their corresponding yield farms for self-paying leverage.

Ratio’s mainnet and governance token is launching by March 25th, 2022.

Ratio’s vision is to De-Risk DeFi using quantitative and qualitative risk metrics and credit risk modeling to build cutting edge financial products that mitigate and communicate to retail and institutional investors the risks associated with this new unique asset class. This is done via the Ratio Risk Rating system, which is a Moody’s style risk label ranging from AAA to F. The higher the creditworthiness of the collateral, the higher the rating.

Ratio is committed to being a leader in the space and prioritizes partnerships that will strengthen the Solana ecosystem. Ratio celebrates transparency, thoroughly considers risk, and shares in the success of its users.

Ratio understands and respects the ecosystem Saber has created and recognizes its significance in the crypto space. Ratio believes that a partnership between itself and Saber would lead to a mutually beneficial relationship that would create better outcomes for both parties. Together, as partners Ratio and Saber could create the future of Solana’s stablecoin ecosystem. This proposal provides an outline of what a potential partnership could look like in the short term.

Proposal

In the near term, Ratio envisions a partnership with three pillars: Collateral Onboarding, Treasury Swap, and Marketing.

## Pillar 1: Collateral Onboarding

The first pillar is Ratio accepting Stable-Stable LP exclusively from Saber on Ratio’s platform. Ratio will accept Saber LP as its first form of collateral ever, which will be automatically redeployed into the corresponding yield farm on Quarry, and allow users to mint USDr, the first ever algorithmically risk adjusted CDP stablecoin, against their position allowing Saber’s liquidity providers the opportunity for further capital efficiency while understanding the risks of their position. Given our investors and core backers around the Solana ecosystem we believe this would play a huge role in cementing Saber as the most dominant stable-swap.

Pillar 2: Treasury Swap

The second pillar is a strategic treasury swap for Saber tokens in exchange for discounted Ratio governance tokens ($RATIO). A financial transaction between the two protocols we believe provides a great structure for formally aligning our financial interests. In doing so, all future work done towards strengthening this proposed partnership is not only an investment in the people at Ratio Finance and the Solana ecosystem, but also a financial one for Saber, which is important to drive internal decision-making.

The terms for the Treasury Swap would be as follows:

Ratio gives:

  • $150k worth of $RATIO at a price of $1.50 (discount of 25% off of our last raise on Republic at $2.00 per token). The tokens would need to be vested linearly over 2 years after a 6 month cliff (standard practice).

SaberDAO gives:

  • $150,000 worth of SBR tokens at market price at the time of the proposals acceptance.

The swap would be conducted directly between treasuries. Ratio will then max vote lock the SBR tokens for 5 years, and vote for USDr-USDC gauges in each epoch to increase our liquidity.

The RATIO tokens Saber receives will have a plethora of benefits including a state of the art governance mechanism and will implement a veRATIO model as well as an array of cutting edge staking and fairdrop opportunities to further increase their stake in Ratio.

Note: Participants in the latest round of strategic fundraising include, Republic Capital and 3AC by way of TPS.

## Pillar 3: Marketing

The third and final pillar is marketing. Sharing one another’s marketing engines, Saber and Ratio can together achieve a greater reach and impact than either marketing program could alone. Further details to come from our marketing team.

# Closing Thoughts

In conclusion, Ratio believes this proposed partnership is the first step in a very fruitful relationship. There are many other opportunities for our collaboration going forward, such as:

  • Assisting SaberDAO in assessing the risk of stablecoins and potentially volatile assets on Solana and other chains (i.e. MIM, USDT, FRAX, etc).
  • Active / joint governance
  • Partnership in creation of USDr-based financial products

Ratio requests that SaberDAO action the items outlined in the proposal in order to formalize a partnership. With respect to timing, while flexible, Ratio requests that this proposal is acted on quickly; its mainnet is going live soon and ideally partnership would launch in step. We will follow this post with a formal memo given a positive response. Ratio thanks SaberDAO in advance for its consideration.

5 Likes

As a member of the core team of Saber, and also having had the opportunity to testnet your product, I can confidently say that what Ratio Finance is working on will hugely benefit the Solana and Saber ecosystems, and we should endorse this proposal. :slight_smile:

2 Likes

As a member of both the core Ratio team as well as the SaberDAO I believe Ratio’s Risk Rating System will allow for the saber ecosystem and pools to have a distinct advantage in comparison to other stable-stable swaps across other chains. This could play a huge role in pushing institutions adopting DeFi towards saber and Solana which is so important. With this being said, I am in full support and will allocate all of my veSBR votes towards voting yes to this proposal.

If Ratio Risk Ratings will be able to weigh in on #USDT, #MIM, #FRAX, etc this is gonna be HUGE!!!

This partnership makes sense and is awesome!