Name: REN Lending Pool
Scope: A native Lending Pool that Node Operators can borrow REN from, and REN stakers to the pool can then earn network fees + lending rates.
Currently, REN holders of less than 100k REN are unable to participate in node staking, therefore there’s no demand from smaller holders to hold Ren. I propose an upgrade to the protocol that allows any holder to stake their Ren into a pool that node operators can borrow from.
A native REN lending pool can allow node operators to use their locked REN as collateral to the stakers. The stakers can then earn the Ren protocol fees of the node operators that are borrowing from the pool.
A node operator can continue operating the node and maintain their price exposure to REN, while at the same time making their node a productive asset that can be used to borrow REN to then be used at any of the large lending protocols that accept REN as collateral.
A Lending Pool is created where REN holders can deposit any amount of REN.
Then the node operator borrows REN tokens from the Ren Lending Pool; The node operator can choose how much of his REN he likes to borrow against from what he has bonded in the node bonding pool and according to this percentage that is how much of his REN fees is divided among the lending pool.
This in effect could double the amount of REN staked while still maintaining the same economic incentives. Aligning both small and large holders of the REN token to continue providing security for the network.
The lending pool also carries the benefits of allowing node operators to become shared staking nodes by borrowing 50k REN from the Lending pool and only having to put up 50k REN to run the additional node.
A maximum threshold of 80% can be used so that the node operator has at least 20% to be used against slashing events.
There should be no liquidation risk since the asset lent and borrowed is REN. In order for the node operator to get back their Bond the loan to stakers must be paid back. In the event, the node operator is not live and not earning fees the lending pool can mortgage the bond to pay back lenders of the pool.
Governance can decide the lending rate or a utilization curve can be used similar to that of Aave and Compound.
A Lending Pool smart contract and logic.
The staking contract will need to upgrade the logic to prevent nodes from withdrawing their total balance if there’s a current loan open.
A MakerDao proposal to accept REN as collateral to provide a stable lending rate of DAI.