Right now the 15 FLX/day reward to RAI borrowers in the rari fuse pool is not being well-allocated.
People are depositing RAI, then borrowing RAI, redepositing RAI and repeating, in order to maximize their FLX reward. This is not of much use to the protocol most of the time. I guess one could argue that it acts as a RAI sink and increases RAI price but 15 FLX/day is a large price to pay for this.
There’s a total of less than $500 worth of non-RAI in the contract: Grafana
This makes the fuse pool almost useless unless RAI price > red price – it can still be used for shorting RAI but RAI hasn’t been significantly above red price for quite a while and we already have Aave and Kashi for that.
If there is USDC/DAI/FRAX liquidity in it then the pool could be used for going long RAI (would’ve been nice a week or two ago when RAI price was hovering around $2.95).
Only reward people for borrowing RAI if their collateral is not RAI.
I think the simplest way to do this is to modify the current rewards such that RAI borrowing rewards are capped by an account’s fDAI/fUSDC/fFRAX balance divided by 1.428 (I think I did the arithmetic right with 70% collateral factor):
Other suggestion: right now the fuse collateral factor is 70%. This seems unnecessarily conservative. No idea if this is possible but if it is, up it to 75 or 80%.