Purpose
This topic has been brought up already by community members in our channels and also in the forum here by @idal. We therefore would like to propose the following:
This Gitcoin - Hackathon is a chance for Idle to co-sponsor a grant in order to build a yield farming dapp that is using Compound via B.Protocol. The prize bounty for this challenge is $4,000 USDT (2k$ Idle + 2k$ co-sponsors).
Importance
B.Protocol is a backstop liquidity protocol, already integrated on top of Compound and MakerDAO (with Aave next), enabling Compound users to manage their positions via B.Protocol smart contracts and an open source front end. Total TVL in B.Protocol is over $260m, as of today.
B.Protocol adds value by making lending platforms more stable by incentivizing keepers to commit on liquidation of under collateralized loans while shifting the miners’ extracted profits back to the depositors. Currently, liquidity providers are not allowed to participate in the keeper system.
B.Protocol is an interface to Maker and Compound (with Aave next) that gives its users exactly the same collateral and debt interest rates, and in addition allows its users to share the liquidation proceeds, and also get BPRO governance tokens.
B.Protocol’s smart contracts are fully compatible with Maker and Compound. Users can manage their B.Protocol positions using DeFi Saver.
Hence, any yield farming dapp that utilizes Compound would benefit by using them via B.Protocol.
By co-sponsoring the grant with a prize bounty of $4,000 USDT (2k$ idle + 2k$ co-sponsors), Idle expects to further incentive the developer community. Given the quality of code is approved and ready for production, Idle would be able to use Compound via B.Protocol with the aforementioned benefits.
Measure of Success
- Increase in Compound APY (primary)
- Increase TVL (secondary)
Success Criteria
- Community agrees with the idea and the Treasury League proceed to co-sponsor the Gitcoin grant
- Builders submit the code and both B.Protocol dev team and Idle’s Dev League review the code to assess quality and security
- Idle Leagues and B.Protocol announce winners and reward them with 4,000 USDT (2k$ idle + 2k$ co-sponsors)
- Upon grant completion, Idle Leagues can reach out to winners to understand if they’re willing to keep contributing to the Idle protocol, with the possibility to get into the Dev League within the next mandate
Desired Outcome
The APY of the IdleToken pools should improve as on top of the normal Compound APY, Idle would share the liquidation proceeds plus B.Protocol rewards. Therefore, it would be fair to expect an increase of new IdleToken accounts and possible increase of TVL.
Moreover, after Compound and with Aave integration next, Idle can be one of the early ones benefiting from B.Protocol liquidity providing incentives and opening the door for deeper DAO2DAO reciprocation.
Security Overview
B.Protocol smart contracts were audited by Solidified (link here Compound integration).
The audit was focused on verifying the security of user funds. The user incentive code was not part of the scope of the external audit, and was only reviewed internally by the team. However, it was verified by Solidified that user deposited funds are safe with respect to any (possibly even malicious) such code. Security audits do not eliminate risks completely and the risk of software & smart contracts can not be eliminated.
Integrating into B.Protocol would require Idle to connect to Compound via B.Protocol, opening up to additional smart contract risks with B.Protocol.
For example, Idle → B.Protocol → Compound
Next Steps
- This post will be open to feedback for the next 24-48 hours
- If there’s no arguments against this matching sponsorship, we will proceed with the official announcement
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