Usage of Liquidity-Pool-Tokens as Collateral

[defiprop]

What would you like to be added:

Allow the usage of (selected?) Liquidity-Pool-Tokens as collateral in vaults.

Why is this needed:

The Liquidity-Pool-Tokens represent a value that is at least as valuable as the sum of the pooled tokens. Maybe give it a try with DFI-DUSD (and thereby make it more attractive to mint DUSD, in order to accelerate its devaluation of DUSD closer to its nominal value, which many people consider an issue). But I think this could be extended to any pool pair in the long term.

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[MX24C]

The idea does look nice in case of stablecoin and btc LP tokens. It should not be possible for stock LP tokens because they are not asset backed in the vault. The collateral of the vault does cover token A and token B. If you combine A and B to an LP stock token and you bring it into a vault, then you double the asset value in the vault - but 50% of it is not covered by a collateral. Some "smart" people would then create money by blowing up vault and let run it into liquidation. When it will come to liquidation the tokens are not backed fully.

[defiprop]

@MX24C Yes, you might be right on that. But when you still have the constraint to have 50% DFI (either in form of part of a liquidity-pool-token OR pure DFI in combination with liquidity-pool-tokens that involve dTokens)? Thereby the collateral should be high enough in my opinion.

[Jouzo]

Should be discussed in a DFIP.