Future directions for Idle Protocol and definition of a Community Roadmap

2020 was a terrific year for Idle. With the community’s growing engagement, the team delivered a consistent stream of protocol improvements and saw major traction across a range of metrics.

To recap, here’s an incomplete list of some of the bigger milestones that were achieved in 2020:

  • Multiple upgrades and improvements
  • Support for numerous assets and protocols
  • Risk-Adjusted strategy introduction in partnership with DeFiScore
  • Multi-protocols’ yield-farming strategies
  • $IDLE governance token release
  • $220M max peak of TVL in Idle
  • Community-led improvements to governance module

Idle is a living, on-chain protocol that is now governed by $IDLE holders. We’re delighted with what we and the community delivered so far, but it will have a minimal impact unless we all continue to deliver in 2021.

This post will outline what has been discussed by the community, and what could be shipped this year.

As part of the process for determining the priorities this year, we’re keen to discuss with our community and signal what should be focused on, both at a high level and in more detail. Through the governance process, we would use this feedback to shape an actionable plan for the protocol.

This post aims to help new users understand our community-led vision and future directions, as well as align priorities, communicate values, and organize planning.

Below is the list of themes that generated the most community engagement and we believe we should tackle this year, without a particular prioritization. These items are proposals only and are subject to change via community consensus.

The following list sets out different topics divided by the effort required to achieve them. Under “high-effort” we’re collecting proposals that need a careful planning phase and months of development; the “low-effort” category lists quick improvements. “New ideas” are topics that might be explored and then added to one of the previous categories.

HIGH-EFFORT:

LOW-EFFORT:

  • Multiple external security audits on current and future code
  • New assets implementations
  • Batched deposits and withdrawals [deposit WIP]
  • Create Committees for bounties and grants (Forum post)
  • $IDLE staking (Forum post)
  • Create tools/docs to facilitate integrations

NEW IDEAS:

  • Vault products development
  • Incentivize open rebalances
  • Fee sharing program for integrators
  • Improve the voting system
  • $IDLE as collateral on MakerDAO (@Alanone)
  • Tranches/CDOs-like strategy (@Falcone)

2021 is shaping up to be a huge year for Idle. We spent the back-end of 2020 forming a rough consensus within our community for governance decisions, and we’ll be continuing that process this year.

This will include using the community’s input to prioritize the items for any releases, whether it’s through Discord or here on our governance forum.

If there’s anything in here you wish to talk about further, drop a comment down here!

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Nice!

What about curve.fi integration? It kind of went off the radar.

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Curve integration, as Harvest one, is still undergoing fixing and refit by their teams. The integration issue is similar, but Curve one is a bit more complex. Our knowledge is that they’re working on it, but it would also depend on their backlog.

Emiliano’s IdleTokenHelper is a great step toward fixing it and easing the job for integrators.

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Scenarios in DeFi can frequently change, but this amazing list is the starting point.

Now we might start to select hot topics from this list, in order to define a feasible medium-term community roadmap.

If we can find some consensus on these initiatives, the Governance and its departments (e.g. Treasury League), crypto builders, and community contributors can focus their efforts on such topics.

Each category (high-effort, low-effort, new ideas) has 6 items, therefore a first step might be to pick 3 topics in each category and motivate the choice.

A possible framework for the shortlist might be:

  • Category
  • Task 1
    • Rationale/Motivation
  • Task 2
    • Rationale/Motivation
  • Task 3
    • Rationale/Motivation

This is a call to action to Idle fellows like @8bitporkchop @Falcone @FedeCrypto @aasinghal @Pierrick @idal @konijntje @unicorn @Simon @Stealthbird97 @ETM612 @noahniuwa @mikojava @Cippo @simoneconti @felix @PNum @DeFiNavy @johndoe @krzysu and many other community members that enriched previous discussions with their feedback!

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That would be nice, but it looks a bit too ambitious at this point. There are certain requirements to meet, like liquidity level. See the list of “Deferred” collateral applications at Collateral Framework Official - Google Sheets to get an idea.

We may have more luck on-boarding IDLE as Aave lending/borrowing asset, once their V2 markets framework ramps up (graduating to collateral status is, again, a different story).

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Under the “low-effort” category, I may prioritize “New asset implementation” and “Idle staking” followed closely by “Tool/Docs” and “multiple audits”.
The 2 firsts would probably allow to attract more users to the platform and more commitment to the protocol.
The 2 lasts would obviously ease other protocols to leverage on Idle (security looks unavoidable to me).

Under “High-effort”, the demand for coverage options against loss is growing so it seems sensible to prioritize that (coverage products’ scope is growing, newcomers like unslashed.finance as well as first movers like Nexus Mutual should be considered).
Then, I would pick “new underlying protocol implementation” to expand Idle reach followed by Long Term LP reward program (if that’s what it is about).

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In order to prioritize the roadmap, we could do an Effort/Reward kind of chart.

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I think the following proposals could be interesting:

  • Put $IDLE into incentivized staking like Aave
  • To create a “button” to be able to withdraw all your rewards from all pools at once (and not have to do it for each individual pool), possibly at zero gas costs :blush:
  • To integrate the possibility of fiat-on-ramp with direct deposit into the preferred pool
  • To incentive tokenholders to provide liquidity to the future Balancer pool with rewards in $IDLE or possibly stablecoin
  • To create an iUSD / iEUR (Idle stablecoin) along the lines of Synthetix :muscle:

I don’t think is a right choice at the moment, price is too much volatile and there is not much liquidity around. Maybe in a future, or better try to create our stablecoin non linked to fiat.

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Great Roadmap!

I would like to share some ideas I think interesting

  1. Cross stable strategies (e.g. maximize USD yield across different representatives DAI-USDC-USDT etc)
  2. EUR assets
  3. C.R.E.A.M. integration
  4. Flashloan support, increasing yield for depositors and implicitly adding support to protocols which don’t have (e.g. Compound)

What do you think?

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Thanks to everyone for all the contributions here. It’s great to see our community shaping up the next steps and sharing opinions. That’s the right spirit!

We have been discussing and we’d like to propose an initial prioritization for all the tasks/deliverables pointed out in the previous comment.

With @Pierrick suggestion, we drafted an Effort/Value chart to understand what features we should start building first:

Our idea is to address the upper-right quadrant (High Value, Low Effort) first, and gradually build the upper-left quadrant’s tasks depending on market demand and changes.

The next step for this community roadmap would be to vote (via Snapshot) and get a consensus on the priority chart listed above.

If you have any feedback about this prioritization map, feel free to drop a comment down below.

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Why direct fiat on-ramp and insurance is considered “low user value”???
Imo both would help strengthen the perception of IDLE’s ease and safety.

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Regarding the coverage I think it was mainly regarding the fact that without incentivization the user value is low just because the premium is higher than the apy received, but we can for sure move it in a different area, where would you see it? As an addition if we also follow the route of the tranches system a product with coverage included is represented by the senior tranche.

For the fiat-on-ramp I think we put it there because the volume generated through fiat-on-ramps compared to the total TVL is a really absimal, @Teo should have some numbers. It would be helpful to have a direct on ramp for eg USD to idleUSDC so one can also ‘skip’ the ETH gas fees for the deposit and instead pay a fee based only on their deposited amount (the fiat on ramp fee) which should favor users who make small deposits.

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Got it.
I am super excited to see IDLE’s proposed execution of the tranches system. When I look at existing products I have not seen so far anything that comes even close to IDLE’s UI and simplicity.

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  1. ETH strategies (same as we already have with WBTC) is a must and should be given top priority considering it’s low effort. Especially considering how the supply of ETH is going to drop with ETH2 staking and EIP1559.
  2. Automated harvesting to be honest it’s not high value. That’s because the only ppl which need to harvest IDLE frequently are those that dump it straight away.
  3. I don’t know why IDLE staking is high effort. But you can combine it with fee sharing program: only staked IDLE should get access to governance voting and fees share. This should stop the IDLE dumping we have seen so far.
  4. Great job team, but please find ways to incentivize the hodling of IDLE: right now it is more profitable to dump it and add into the pools. We should invert the trend.
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@unicorn re direct fiat on-ramp: as William said, there hasn’t been a high volume for fiat on-ramps. If we look at Ramp (the one with the most volume in Idle), we had ~ $50k volume since May 2020, and most of it was during the initial 0% fees promo we’ve done with Ramp. That said, it shows us that audience is not currently oriented to fiat onramps (and that’s why we included it as Low User Value).

However, I believe we can spin another test with fiat onramps with the direct deposit – I’m looking if we can partner up with a fiat-onramp to provide that without having a heavy burden on Idle’s development side (partners should directly interact with Idle contracts or have an idleTokens reserve for their customers).


@nrgskill great points!

Fully agree on (1), ETH would be one of the top priority considering all benefits that bring with it. For reference, there’s a discussion about that here.

On (2), automated harvesting would likely be for accrued gov tokens (excluding IDLE), but I see what you’re saying on the user profile for that specific automation – I think this possible downside can be dampened if our community agrees to give another usage to IDLE.

And this leads me to (3) and (4) topic, which has been discussed here and partly here (as a component of tranches strategy). I believe the trajectory that the governance is pushing for is clear, but there are some flaws we need to address before proceeding with that (eg, it’s a bit early to start fee sharing with stakers, as the treasury is still growing and part of it will be routed to the Smart Treasury, and fees shared would have a low impact on stakers’ return).

The reason why staking is High Effort, it’s because the CRV model (which has been discussed as a possible implementation) would require us to change the entire governance module for Idle, and it’d be a quite high effort task. Other staking models might fall into a different effort classification.

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Staking is crucial for raising the use case of idle.
And imo it should be a priority which would require little effort.

I would vote for an easier staking model that adds functionality to idle soon rather than redesign and build basic infrastructure around a 3rd party later.

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@unicorn I am not sure of the best method, but I also agree that we need to add a clearer incentive such as a simple staking mechanism that adds more use case and rewards users to hold IDLE and support sustainable price appreciation.

I would also support a vote on such an initiative and believe it would be well received by early adopters who are holding the IDLE token

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Imo the key things should be

  1. Aave v2 and Curve UI on site (I think both are being worked on and almost complete anyways)

  2. ETH integration (since it will help with TVL dramatically)

  3. Tranches (since its a form of insurance, staking, and allow for high APY), which is attractive new utility to attract fresh eyes.

  4. Automated Harvesting and Batch redeem (easier, cheaper, and better user experience is key). Idle already focuses on simplicity when navigating the platform… now we just need to focus on the user experience.

  5. Staking/Fee sharing program - (I think we need some form of token locking early to keep charts looking healthy and to attract/keep new users). Most new members usually have that as their first question “Sirs, is there staking and fees?”. Even if its not much $ being shared, having that in place just adds an extra utility that users like to see.

There are several things we can do for #5.

  1. We can use some of those unclaimed tokens and use some to distribute to users who agree to lock up for 6 months. I think it helps with token dumping and maybe it can be used to treasury LP in the meantime as well.
  2. If tranches ends up being a priority, maybe all those members who choose to lock/stake, can earn all the fees generated from the high APY tranche.

Or maybe a mix of both. Just ideas, not sure how good they are.

Then

Flash loan support
IDLE MAKER DAO collateral
New Assets

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Talking about how to increase TVL:

I definitely think that adding more protocols (eg AAVE, CURVE, YFI) is really important. I have USDC sitting in dYdX, YFI, compound, uniswap(usdc<>dai), and idle. If I ignore the idle governance tokens, Idle is underperforming all other channels (including governance tokens it’s the best). For new users who don’t do the math, it looks like Idle just puts everything into compound and then gives lower APY. So I think there needs to be some better way to clearly show that idle is doing ‘something smart’ with your coin by utilizing different protocols.

I also think direct integration with wallets/exchanges (eg coinbase wallet, gemini wallet, okcoin) should be a great way to increase TVL as well as net users. Is there anything we can do to push that?

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  • They are working on CurveUI for Idle website.

  • They are currently working on Aave v2 wrapper.

  • They are currently in YFI vault experimental for USDC and have some devs from yearn helping build stuff as well.

  • Token helper to allow others to easily plug into IDLE is complete

They are already integrated with big ones

IDLE gets the best yield based on risk. If its not refreshed all the time, then maybe at times, it wont be the best yield, but will get better/more frequent as more users come in.

So its actually rebalancing through all the protocols already. Not sure what you mean by “clearly show idle is doing something smart by utilizing different protocols”

Also, its been stated that they’ve talked to several ppl already and many are interested

Other big names will come as IDLE continues to expand and provide more utility. Automated rebalancing is their advantage at the moment.

Just need to be patient.

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