Tokenize Kashi Lending to Create Native Flexible Leverage Index (FLI)

If you are not familiar, IndexCoop utilizes Compound to offer an ETH 2x FLI for people who want exposure to leverage but not have to worry about getting liquidated. They can just buy the tokenized version of the asset. I am wondering if this would be possible to do with Kashi with select assets like SUSHI, YFI, etc. I think the main issues here would be:

  • Making sure there is enough liquidity to adjust the collateral when needed

  • Having a bot auto-adjust collateral

  • Incentivizing liquidity for the pair, but I’d imagine that would be done with Onsen.

What does everyone think of this idea?

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I think it’s a good idea, and thanks to isolated pairs that kashi provides it will be more secure than Compound

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