dYdX deactivation

Authors
Idle Treasury Leagues

Summary
This proposal removes dYdX as underlying yield source from Best-Yield DAI and USDC pools.

Rationale
dYdX Inc. team announced that spot and margin trading on the dYdX Layer1 (Solo) will enter Close Only Mode. All users are strongly encouraged to close any open position and withdraw from all lending pools before the Close Date.

Idle tokenized dYdX Layer1 positions to allow users to earn interest on DAI and USDC, and that source is currently used by Idle strategies.
With the upcoming wind-down, Idle Governance should proceed with dYdX support removal.

In that scenario, DAI and USDC pools will deploy funds only across Aave and Compound.

A possible way to increase the number of yield generation services is the implementation of Fuse pools.
During these months, Rari team worked hard to scale their product, reaching $1b TVL in Fuse (the lending market).
Fuse hosts different segregated lending pools, each with its own supported assets. Pool #6 is the most liquid one, with $500m+ TVL and about 20 assets used as collateral. The pool is managed by crypto influencer Tetranode. At the time of writing, the borrowing section is no more available and has been stopped due to high leverage.
Despite the adequate level of infrastructure security shown in these months by Fuse protocol, each pool carries systemic risks associated with the listed assets. Considering the high LTV of the Tetranode pool and the concerns raised by its owner, Pool #6 carries a risk profile that is not compatible with Idle’s one.
Other pools like Pool #8 ($100k TVL for DAI) owned by Fei Dao or Pool #9 ($5m TVL for DAI, $2.3m TVL for USDC) owned by Frax and Reflexer carry lower systemic risks, but Idle’s liquidity would heavily affect pools’ rates.

Specifications
The technical implementation will be developed by Dev League.

Actions:

  • dYdX removal from Best-Yield DAI and USDC pools: 2 actions

Next Steps
We are going to leave this thread open for comments regarding this proposal, and in about 24hrs, if there are no objections, we will proceed with the Temperature Check.

9 Likes

Let’s move the proposal to the Temperature Check phase!

:arrow_right: Poll for $IDLE holders: HERE
:arrow_right: Poll for $IDLE Stakers (stkIDLE holders): HERE

:alarm_clock: Polls will close 2021-10-29T13:00:00Z.

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

Cast your vote :writing_hand:

4 Likes

Temperature Check approved :white_check_mark:

:point_right: Nex step: on-chain proposal (IIP-15)

3 Likes