[IIP-39] Update IDLE distribution, Steakhouse USDC as a new USDC BY yield source, transfer USDC to see the IDLE-USDC pool, transfer M2-2024 budget

[Biaf]

Summary

The IIP aims to pause the Liquidity Mining program, formalize the strategic round agreement with Rockway X, update the USDC Best Yield’s vault underlying markets, seed a new IDLE pool launch on Uniswap, and transfer the M2-2024 budget to Leagues.

This IIP post takes the place of the old one [IIP-39] Update IDLE distribution, transfer IDLE to vesting contract, Steakhouse USDC as a new USDC BY yield source, transfer USDC to seed the IDLE-USDC pool.

References

• IDLE incentives distribution update V post - Feb 2024
• Idle DAO Strategic Round with Rockaway X post - Feb 2024
• Steakhouse vault as new yield source for USDC BY post - Mar 2024
• AMM liquidity improvements II post - Mar 2024
• Leagues M2-2024: Roadmap and M1-2024 Recap post - May 2024

Rationale

1. IDLE incentives distribution update

The DAO agreed to pause the Liquidity Mining program that has been distributing IDLE to users since 2021

@Biaf

Pause the Liquidity Mining program

One option is to pause the Liquidity Mining distribution

• From 250 to 0 IDLE/day

From a DAO treasury perspective, this option would stop the emission of IDLE and reduce the selling pressure on the DAO governance token.

Given the current low emission, the yields of BY vaults would be minimally affected. A possible downside of this pause is linked to the integrators that rely on IDLE rewards. To adjust this the DAO may update the Integrators program and create ad-hoc solutions for partners that count on the additional return given by IDLE.

2. Strategic round with Rockway X

In light of the recent round closure, the parties agreed not to transfer/vest any IDLE tokens to the investor. The DAO tokens will be kept in the long-term reward fund.

RockwayX will transfer the stablecoin to the Idle DAO’s fee treasury in 2 tranches

@Teo

Agreement Terms

The terms of the agreement remain largely unchanged, except for the investment structure. The investment will now occur in two tranches of $500,000 each with the second tranche tied to $50M TVL milestone, as partly mentioned in our previous update here. The first $500,000 tranche has been already deposited into the Fee Treasury controlled by Idle DAO.

@Teo

This proposal is meant to formalize the funding round and strategic agreement between Idle DAO and Rockaway X to solidify the relationship as liquidity providers and users of our product suite and pave the way for a new line of institutional-grade yield products.

@Teo

This funding round provides the following:

• Rockaway X will allocate 1,000,000 USDC (or other stablecoins) to Idle DAO’s Fee Treasury.
• Idle DAO will allocate 1,733,333 IDLE from the Idle DAO’s Long Term Fund to Rockaway X Vesting Contract.

IDLE tokens taken from Long Term Fund will be subject to a 2-year vesting period, with 33% released after a 12-month cliff and the rest with a 12-month block-by-block linear vesting.

3. Steakhouse vault as new yield source for USDC BY

The Steakhouse Senior Tranche will be added as a new yield source to the USDC Best Yield vault.

@Biaf

Following the M1-2024 roadmap, Idle DAO Leagues has initiated the process of revamping the Best Yield vaults. This process counts on multiple steps:

1. Unwind the Junior Best Yield vaults
2. Renew the BY underlying yield sources to offer the best yield-optimized offering in the market

This post aims to expand on the second step listed and specifically focuses on the USDC Best Yield market.

The vault will improve the yield of the USDC BY vault while having a safe risk score of B.

4. AMM liquidity improvements

To improve the IDLE liquidity in the markets, the DAO decided to follow these steps (2/3 already completed). In light of the recent round closed and the new agreement terms, Leagues advise reducing the liquidity increase by half, i.e. $75k, to ensure enough working capital to achieve the next steps in the roadmap.

@Biaf

The DAO has shared his preferences about the next steps for the IDLE AMM liquidity improvements:

• Migrate the 8020 IDLE pool to Uniswap v3
• Launch an IDLE-USDC pool on Uniswap v3
• Bootstrap the pool with $150,000 of DAO’s treasury

5. M2-2024 Leagues budget

This IIP will be used also to transfer the M2-2024 budget that has been pending since the DAO vote. Given the calendar difference, this IIP will transfer only 33% of the M2-2024 budget, i.e. $50k.

@Teo

Leagues M2-2024 Expected Budget

The expected budget for M2-2024 is $148’015 in stablecoin and 66’490 IDLE (using a 20-day rolling price at the time of writing).

At the time of writing, the Treasury League multisig stablecoin or equivalents holdings currently stand at $55’343 in stablecoins (excluding $129’353 in ETH/WBTC/altcoins, using price at the current time) so if the Temperature Check for IDLE tokenholders is positive, $92’672 funds will be transferred from the Fee Treasury (in either one or two installments), and 66’490 IDLE will be transferred from the Ecosystem Fund via the next IIP.

Specifications

The code of the IIP-39 can be found on GitHub here and consists of 5 actions.

IIP-39 actions:

• 1 action to set the Liquidity Mining distribution, _setIdleRate, from 250 to 0 IDLE/day
• 1 action to perform the last claim of all unclaimed IDLE for the Best Yields vault
• 1 action to replace the cp_POR_USDC Senior Tranche with the Steakhouse USDC Senior Tranche in the Best Yield USDC vault
• 1 action to transfer $75,000 equivalent in stablecoin from the Fee Treasury to the Treasury multisig wallet to increase the IDLE-USDC pool liquidity on Uniswap*
• 1 action to transfer $50,000 equivalent in stablecoin from the Fee Treasury and 66,490 IDLE from the Ecosystem fund to the Treasury multisig wallet to fund the Leagues’ budget for M2-2024*

Where the Steakhouse wrapper contract address is:

• Steakhouse USDC Senior tranche 0x96Dd27112bDd615c3A2D649fe22d8eE27e448152

*Please note that the above actions concerning stablecoin transfers will be merged in the IIP code.

Next steps

The temperature checks for the above proposals have already been successfully closed. We are going to open the on-chain voting phase soon after the publication of this Idle improvement proposal.

IDLE tokeholders are advised to check their delegations before the opening of the next Idle Improvement proposal. Once launched, it won’t be possible to delegate your IDLE votes.

[Biaf]

Cast your on-chain $IDLE vote here: HERE
End date: 2024-06-21T01:00:00Z

$IDLE stakers (stkIDLE holders) can vote here: HERE
End date: 2024-06-20T18:00:00Z

The threshold to make the off-chain poll valid (both metrics should be reached):

• 20% of circulating stkIDLE voting the poll (min. ~77k stkIDLE)
• at least 70% on the same option.

The stkIDLE voting calculator will be used to calculate the final results.

Make sure you have been delegated to participate in this voting round

[Biaf]

IIP-39 passed with 1.42m IDLE votes in favor and has already been queued for execution