Clearpool YTs as a new yield source for DAI BY - Portofino

[Biaf]

Author

Treasury League

Summary

A proposal to add the Portofino Clearpool DAI Yield Tranches as a new yield source for the DAI Best Yield strategies.

References

• Euler staking DAI PYTs as a new yield source for BY post
• Update Best Yield DAI yield sources post
• Portofino technologies website

Background

After the recent exploit on Euler, Leagues have suggested to remove the Euler Yield Tranches from the basket of yield source of Best Yield strategies as a precautionary measure before a new audit is completed.

The current yield source of the Best Yield strategies would then be:

Strategy	Token	Underlying markets
Senior BY	DAI	Aave, Compound, Euler
Junior BY	DAI	Euler, Morpho

Proposal

This proposal aims to add a new Clearpool Yield Tranche to the Best Yield strategies based on DAI:

• Clearpool DAI (Portofino) YTs, with specs available on GitHub here

Similar to previous Clearpool’s integration, Portofino’s one would benefit doubly the Idle users

@Biaf

By integrating Clearpool USDC (Senior) tranches as a new yield source for the USDC BY strategy, we can create a two-side benefit for the Idle protocol:

1. The USDC BY strategy can add a new yield source, besides the usual Aave and Compound, able to offer an average APY in the 5% to 10% range. Currently, Aave and Compound offer APYs lower than 1%. This significant increase in yield can benefit current BY LPs and attract new users to the protocol.
2. The USDC BY funds flowing to the Senior side of Clearpool PYTs can create a stable source of funding for the Senior tranches and consequently incentive new Junior liquidity deployments thanks to the boosted APYs available (with an expected average APY in the range of 10% to 20%).

Yield Tranches are live since December 2021 holding a cumulative TVL of up to $50m.

Portofino details

Portofino technologies is a high frequency trading market maker that uses the borrowed funds as trading capital, providing superior returns thanks to its advanced machine learning & stochastic control techniques.

Clearpool (Portofino) pool is live since early March. The Portofino pool has a size of ~$1m and a maximum borrowing capacity of up to $24m. Credora rates the borrower with an A.

Protocol	Borrower	Capacity	Pool size	Credora’s rating
Clearpool	Portofino	$24,300,000	962,740	A

At the time of writing, the Portofino pool provides 16.55% APR with an 81% utilization rate (source).

The pool will use the Peg Stability Model (PSM) of Maker DAO to swap 1:1 DAI to USDC, avoiding any slippage or impermanent loss risk.

Risk rating

Following the new version of the risk rating framework, the Clearpool (Portofino) Yield Tranches can be considered as a valid market to become a new yield source of the Best Yield strategies.

In order to trigger any BY deployment, the Yield Tranches will need to have at least a 30% coverage on Senior funds coming from the Junior counterparty.

@Biaf

Rating example: uncollateralized lending

Using the framework described above, we can rate the newly launched Clearpool’s (Portofino) as follows

Next steps

We are going to leave this thread open for comments regarding this proposal, and tomorrow, if there are no objections, we will open the temperature check.

[Biaf]

Temperature check voting

The voting phase to remove the Euler YTs and add the Clearpool Portofino YTs starts now

• Remove Euler Yield Tranches
• Add Clearpool Portofino’s Yield Tranches
• Both Actions
• None of the above

Poll for $IDLE holders: HERE
Poll for $IDLE stakers (stkIDLE holders): HERE

Polls will close on 2023-04-11T18:00:00Z

The final $IDLE voting weights will be calculated using the approved calculator.

Looking to delegate your vote on Snapshot? Follow the official Snapshot guide.

Let your vote count!

[Biaf]

Temperature check results

Temperature Check passed

The proposal to update the DAI BY’s underlying markets by removing the Euler YTs and adding the Clearpool (Portofino) YTs is now ready to hit the on-chain phase!