[NGV-07] List XAUt0 as a Neverland Collateral and Borrowable Asset

Governance Governance Vote
1

[NGV-07] List XAUt0 as a Neverland Collateral and Borrowable Asset


Vote

[NGV-07] List XAUt0 as a Neverland Collateral and Borrowable Asset

Summary

This Governance Vote proposes listing XAUt0 as a new reserve in Neverland’s existing canonical cross pool on Monad, with collateral and variable-rate borrowing enabled.

XAUt0 is the omnichain form of Tether Gold available on Monad. Each XAUt0 represents one XAUt, backed by one fine troy ounce of physical gold, while the USDT0/OFT architecture moves the asset between supported networks.

This proposal does not launch a new lending market. It adds one reserve to the canonical pool using Neverland’s existing reserve-token implementations and rateStrategyVolatileEasyHigh, with the native Chainlink XAU/USD feed on Monad as its oracle source. No custom price adapter, new interest-rate strategy, core protocol upgrade, separate pool deployment, or user migration is required.

The listing is intended to support two complementary uses:

  • XAUt0 holders can supply the asset as collateral and borrow other assets enabled in the canonical pool.
  • Users can borrow XAUt0 at a variable rate against otherwise eligible collateral, creating a limited short-gold borrowing market.

XAUt0 would launch with a 30 XAUt0 supply cap, a 10 XAUt0 borrow cap, 40% LTV, a 55% Liquidation Threshold, and a 20% Liquidation Bonus. The Reserve Factor and Liquidation Protocol Fee would each be set to 20%. Stable-rate borrowing, flash loans, E-Mode, use as isolated collateral, and borrowing against isolated collateral would remain disabled.

These parameters define the approved initial launch configuration. If refreshed launch-day liquidity and risk review no longer support the proposed caps, the final payload may use lower supply or borrow caps. Following launch, routine reserve-risk adjustments may proceed through Neverland’s established risk-management and timelock framework. Any material change to the approved reserve architecture or enabled capabilities must return to governance.

Background

XAUt0 extends Tether Gold to Monad through the USDT0/OFT architecture. The proposed listing would introduce a gold-linked reserve to Neverland and allow XAUt0 to function as both collateral and variable-rate debt.

RFC-08 was published on July 30, 2026, proposing that XAUt0 join Neverland’s canonical cross pool under conservative parameters. The RFC evaluated the asset’s token architecture, issuer and administrative controls, bridge dependencies, oracle path, onchain liquidity, liquidation routes, and account-concentration risk.

The RFC discussion received broad support and no substantive objections. Community feedback emphasized the value of expanding Neverland’s asset coverage, introducing a gold-linked asset, creating potential new borrowing demand, and supporting the growth of XAUt0 liquidity on Monad.

The supporting technical and security assessment recommended conditional approval under conservative parameters. The main remaining risks are not normal gold volatility alone, but the combination of issuer and upgrade authority, OFT and bridge dependency, XAU/USD to XAUt0 basis risk, limited two-sided liquidity, and concentration within a non-isolated cross-collateral market.

An isolated market was considered but not selected. Listing XAUt0 in the canonical pool provides broader collateral and debt routing, while the 30 XAUt0 supply cap, 10 XAUt0 borrow cap, 40% LTV, 55% Liquidation Threshold, lack of E-Mode, and disabled isolation-related borrowing are intended to bound the initial exposure.

Request for comments:

RFC-08: List XAUt0 on Neverland

Proposal

This proposal asks Neverland governance to approve the addition of XAUt0 as a new reserve in the canonical cross pool, with collateral and variable-rate borrowing enabled under the specification below.

Reserve and Integration Scope

Item Approved configuration
Network Monad
Market Neverland canonical cross pool
Asset XAUt0
Configuration symbol XAUT0
Underlying token 0x01bFF41798a0BcF287b996046Ca68b395DbC1071
Decimals 6
Token model Transparent upgradeable token using the USDT0/OFT architecture
Monad OFT 0x21cAef8A43163Eea865baeE23b9C2E327696A3bf
Oracle Chainlink XAU/USD on Monad
Oracle source 0x61dD33A34E47a181EE02e42eE0546a3DA808f1B4
Reserve-token implementations Existing canonical Neverland implementations
Interest-rate strategy Existing rateStrategyVolatileEasyHigh
Listing seed 0.01 XAUt0

The listing initializes XAUt0 inside the existing canonical pool. It does not deploy a second pool, a separate provider, an independent access-control system, a new oracle framework, or new market-specific infrastructure.

Once active:

  • XAUt0 may be enabled as collateral alongside other eligible collateral in the canonical pool.
  • XAUt0 collateral may support borrowing of any other enabled reserve, subject to the canonical pool’s existing account and reserve rules.
  • XAUt0 may be borrowed at a variable rate against otherwise eligible collateral.
  • Stable-rate borrowing, flash loans, E-Mode assignment, use as isolated collateral, and borrowing XAUt0 against isolated collateral remain disabled.

Oracle Configuration

XAUt0 would use the native Chainlink XAU/USD feed on Monad. The feed returns an 8-decimal USD price for one troy ounce of gold and is dimensionally compatible with an asset representing one XAUt. No price adapter is required.

The oracle measures XAU/USD, not the executable XAUt0 market price on Monad. This creates basis risk if XAUt0 trades away from the XAU reference because of issuer action, bridge disruption, liquidity withdrawal, market closures, or a short squeeze.

The Chainlink source should therefore be monitored against:

  • Executable XAUt0 sell prices.
  • Exact-output XAUt0 buy prices.
  • Committed Kuru bids and asks.
  • An independent XAU/USD reference, such as Pyth.

Any future replacement of the approved oracle path or introduction of a custom XAUt0 pricing adapter requires further governance review.

Initial Reserve Parameters

Parameter Approved initial value
Collateral enabled Yes
Variable-rate borrowing enabled Yes
Stable-rate borrowing enabled No
Supply Cap 30 XAUt0
Borrow Cap 10 XAUt0
Base LTV 40%
Liquidation Threshold 55%
Liquidation Bonus 20%
Liquidation Protocol Fee 20% of the bonus portion
Reserve Factor 20%
Flash loans Disabled
Isolation Mode collateral Disabled
Borrowable in isolation No
E-Mode No category assigned
Interest-rate strategy Existing rateStrategyVolatileEasyHigh
Oracle Chainlink XAU/USD
Seed supply 0.01 XAUt0

The Supply Cap and Borrow Cap are denominated in XAUt0, not U.S. dollars. Their dollar value therefore changes with the price of gold.

At an illustrative XAU price of approximately $4,000:

  • A 30 XAUt0 Supply Cap represents approximately $120,000 of supplied-asset capacity.

  • At 40% LTV, that cap provides approximately $48,000 of initial borrowing power when XAUt0 is the marginal collateral.

  • A 10 XAUt0 Borrow Cap represents approximately $40,000 of configured XAUt0 debt capacity.

Actual account debt may exceed the approximately $48,000 marginal-collateral figure because XAUt0 is non-isolated, users may combine collateral, XAU appreciation changes dollar values, and accrued interest may take existing debt above the token-denominated Borrow Cap after origination.

At full 30 XAUt0 supply and 10 XAUt0 borrowing, simple cap-to-cap utilization would be approximately 33.3%. Under rateStrategyVolatileEasyHigh, the modeled variable borrow rate at that utilization is approximately 5.5%. With a 20% Reserve Factor, the simplified supplier rate is approximately 1.47%, and treasury accrual is approximately 0.37% of supplied liquidity per year, assuming constant utilization and excluding rounding.

Approved Implementation Scope

Approval authorizes the following reserve-listing actions:

  • Register the specified XAUt0 underlying token in the canonical pool.
  • Assign the specified Chainlink XAU/USD oracle source.
  • Initialize XAUt0 using Neverland’s existing canonical reserve-token implementations.
  • Apply the approved collateral, borrowing, cap, liquidation, fee, and interest-rate parameters.
  • Supply the 0.01 XAUt0 listing seed.
  • Add XAUt0 to the required frontend, indexer, analytics, liquidation, and monitoring systems.

No new lending market, custom oracle adapter, interest-rate strategy, protocol upgrade, or migration is authorized or required by this proposal.

Ongoing Risk-Management Mandate

The parameters above are the approved initial configuration. The final launch payload may use lower Supply Cap or Borrow Cap values if refreshed liquidity analysis, liquidation testing, or launch-day market conditions require a more conservative start.

After launch, Neverland’s team and risk partners may recommend and execute routine reserve-risk actions through the applicable Risk Timelock or emergency framework. These actions may include gradual cap adjustments, collateral-parameter changes, reserve freezing, setting caps to zero, disabling collateral, or pausing affected functionality when supported by liquidity, utilization, concentration, oracle, or liquidation data.

This mandate does not authorize a material redesign of the listing. Moving XAUt0 to a different market, changing the approved oracle architecture, enabling E-Mode, enabling flash loans, enabling stable-rate borrowing, enabling isolation-related borrowing, or otherwise expanding the reserve beyond the approved design requires further governance review.

Risk Considerations

XAUt0 introduces a new collateral and debt asset into Neverland’s canonical cross pool. Governance participants should consider the following remaining risks and controls.

Issuer and Administrative Control

The XAUt0 owner can mint, blocklist, redeem, destroy blocked funds, and change the authorized OFT. The transparent proxy can also be upgraded. Blocking or confiscating balances held by Neverland’s Pool or reserve token could interrupt supply, withdrawal, repayment, borrowing, or liquidation.

The initial exposure is bounded by the 30 XAUt0 Supply Cap and 10 XAUt0 Borrow Cap. Ownership, ProxyAdmin, implementation, OFT, peer, total-supply, blocklist, and seizure-related changes must be monitored continuously.

Security and Audit Scope

The reviewed Monad deployment inherits its security model from the broader USDT0/OFT stack. The assessment did not identify a separate XAUt0-specific audit covering every component of the exact Monad deployment and bridge configuration.

Before execution, the final implementation, ownership structure, OFT peer configuration, DVN configuration, and relevant audit scope must be verified. The supporting Neverland Security Desk assessment is a diligence aid, not an audit guarantee.

Bridge and Redemption Dependency

Cross-chain backing and redemption depend on the Ethereum source asset, the Ethereum adapter, the Monad OFT configuration, LayerZero messaging, issuer access, and deeper markets outside Monad.

Neverland liquidations cannot assume direct physical-gold redemption. Risk sizing must rely on executable secondary-market liquidity and functioning cross-chain infrastructure.

Oracle and Basis Risk

The approved oracle prices XAU/USD while liquidations execute against XAUt0 liquidity. XAUt0 may decouple from the XAU reference during bridge disruption, issuer action, market closures, liquidity withdrawal, or stressed short demand.

The 40% LTV, 55% Liquidation Threshold, lack of E-Mode, conservative caps, and two-sided parity monitoring are intended to contain this risk. Oracle freshness alone is not sufficient. Executable XAUt0 prices must also remain within accepted operating bounds.

Bid-Side Liquidity

When XAUt0 is used as collateral, a liquidator repays another asset, receives XAUt0, and must sell the seized XAUt0 into bid-side liquidity.

At the July 29, 2026 assessment snapshot, the three material indexed XAUt0 AMM pools represented approximately $176,000 of aggregate TVL, with the largest pool representing approximately 74% of that total. The Kuru XAUT_USDC committed order book displayed approximately 13 XAUt0 of bids and 14 to 15 XAUt0 of asks during the review window. Those orders were cancelable and changed materially during sampling.

Aggregate TVL is not equivalent to executable liquidation capacity. Concentrated-liquidity ranges, fragmented venues, route availability, order cancellation, price impact, and market-maker inventory all matter.

The 20% Liquidation Bonus is intended to provide room for slippage and execution costs when XAUt0 is seized. Because the 20% Liquidation Protocol Fee applies only to the bonus portion, the liquidator retains an effective 16% bonus, corresponding to approximately 13.79% break-even sale slippage before gas and swap fees.

Ask-Side Liquidity

When XAUt0 is borrowed, a liquidator must source XAUt0 to repay the debt before receiving the borrower’s selected collateral. XAUt0’s own Liquidation Bonus does not apply to this route because the bonus is determined by the collateral being seized.

The 10 XAUt0 Borrow Cap limits the initial short-gold market, but a cap-sized debt position may still require approximately 5 or 10 XAUt0, plus accrued interest, to be sourced during a maximum-close liquidation. Continuing exact-output buy liquidity is therefore required from launch.

Cross-Pool and Account Concentration

XAUt0 is proposed as a non-isolated reserve in the canonical pool. It can be combined with other collateral, and a single account may occupy a material share or all of either launch cap.

This creates more capital efficiency and routing flexibility than an isolated market, but it also creates broader account and cross-reserve exposure. Per-account supply, debt, health factor, collateral composition, and cap concentration must be monitored.

Liquidation Sequencing

The launch configuration assumes timely proportional liquidations after gradual price movements, with arbitrage or market-maker liquidity replenishing routes over time. It does not assume that AMMs alone can clear the entire Supply Cap or Borrow Cap in one maximum-close transaction.

Maximum-close outage scenarios, route failures, and order-book cancellations must be included in launch testing and documented in the final risk acceptance and keeper escalation plan.

Governance Approval

By approving this Governance Vote, governance participants authorize:

  • The addition of XAUt0 as a new reserve in Neverland’s existing canonical cross pool on Monad.
  • The use of the specified XAUt0 token, Monad OFT, and Chainlink XAU/USD oracle source.
  • Enabling XAUt0 as collateral and as a variable-rate borrowable asset under the approved initial configuration.
  • Initializing the reserve using Neverland’s existing canonical reserve-token implementations and rateStrategyVolatileEasyHigh.
  • Supplying the 0.01 XAUt0 listing seed.
  • The preparation, review, simulation, scheduling, and execution of the final listing payload through Neverland’s Governance Timelock, subject to every launch gate and verification requirement described in this proposal.
  • The authority for the Neverland team and risk partners to delay execution or use lower initial Supply Cap or Borrow Cap values if refreshed market conditions require a more conservative launch.
  • The authority for the Neverland team and risk partners to perform ongoing routine risk management through the applicable Risk Timelock and emergency framework, provided those actions remain within the approved reserve architecture and risk-management mandate.

Approval does not authorize a separate lending market, a custom oracle architecture, a core protocol upgrade, E-Mode, flash loans, stable-rate borrowing, isolation-related borrowing, or a DUST incentive allocation. Any such change requires separate governance approval.

A successful vote authorizes the listing process but does not require execution if a launch gate fails or if current liquidity no longer supports a safe activation.

Voting Options

  • Option 1: Approve XAUt0 Listing
  • Option 2: Reject XAUt0 Listing
  • Abstain (Required)

Execution Considerations

If this Governance Vote passes, execution should proceed as a reserve initialization within the existing canonical pool. No market migration or separate market deployment is required.

The expected execution sequence is:

  1. Refresh XAUt0 liquidity, venue concentration, exact-output depth, account concentration, oracle status, and bridge configuration immediately before payload finalization.
  2. Verify the XAUt0 underlying token, decimals, implementation, owner, ProxyAdmin, authorized OFT, LayerZero peers, and DVN configuration.
  3. Map the deployed token implementation and bridge components to the applicable security-review and audit scope.
  4. Verify that the Chainlink XAU/USD source is correct, positive, fresh, and functioning on Monad.
  5. Finalize the initial Supply Cap and Borrow Cap. The payload may use lower caps than 30 XAUt0 and 10 XAUt0 if refreshed analysis requires a more conservative launch.
  6. Build the reserve-listing payload to register XAUt0, assign the oracle, initialize the reserve tokens, apply the approved parameters, and supply the 0.01 XAUt0 seed.
  7. Complete configuration review, decoded-calldata review, and fork or fresh virtual-network simulation.
  8. Simulate XAUt0 collateral sales of approximately 0.57, 2.97, 9.57, and 20.15 XAUt0.
  9. Simulate exact-output XAUt0 purchases of 1, 5, 10, and 10 XAUt0 plus an approved accrued-interest buffer.
  10. Include Kuru order-cancellation and largest-material-AMM outage scenarios.
  11. Verify both liquidation directions: XAUt0 as seized collateral and XAUt0 as debt that must be sourced.
  12. Confirm that the decoded package does not modify any unselected reserve or unrelated canonical-market configuration.
  13. Record any failed maximum-close outage scenario in the final risk acceptance and keeper escalation plan. The listing must not rely on an unverified assumption that the entire cap can be liquidated through one venue or one transaction.
  14. Schedule the reviewed payload through Neverland’s Governance Timelock with its 24-hour delay.
  15. Execute the payload and verify all post-execution reserve, oracle, cap, role, configuration, and seed balances.
  16. Complete frontend, indexer, analytics, liquidation-bot, and monitoring integration before presenting the reserve as active to users.
  17. Monitor two-sided XAUt0 liquidity, utilization, supply and debt concentration, health factors, oracle basis, token administration, OFT configuration, and liquidation execution after launch.

Routine post-launch risk changes should proceed through the applicable Risk Timelock with its 1-hour delay or through Neverland’s emergency framework where immediate defensive action is permitted. Material changes outside the approved mandate must return to governance.

Closing Statement

This Governance Vote would add XAUt0 to Neverland’s canonical cross pool as both collateral and variable-rate debt without launching a separate market or introducing new protocol architecture.

The listing creates useful gold-linked collateral and a limited short-gold borrowing market, but it also introduces issuer control, bridge dependency, basis risk, two-sided liquidity requirements, and cross-pool concentration. The proposed 30 XAUt0 Supply Cap, 10 XAUt0 Borrow Cap, 40% LTV, 55% Liquidation Threshold, 20% Liquidation Bonus, and disabled E-Mode, flash loans, stable-rate borrowing, and isolation-related borrowing are intended to keep the initial exposure measurable and controllable.

Governance approval should be understood as authorization to list XAUt0 only after the specified technical, oracle, liquidity, liquidation, and operational gates have been satisfied. The reserve should begin conservatively and expand only as genuine demand, executable liquidity, and production performance justify it.


References

1 Like
[RFC-08] List XAUt0 on Neverland