Gitcoin is a decentralized protocol built on Ethereum, with a community of developers that collaborate and monetize their skills working on open source bounties.
The community counts more than 73k developers, and the platform issued ~$13M in bounties during the last couple of years. It is widely known and used in the crypto and DeFi space.
The Idle Labs team is already sponsoring Gitcoin grants along with Badger, Sushiswap, Uniswap, Balancer, and many industry leaders, and this entitles the protocol to launch up to 3 open calls for the upcoming Grants Round 9 Hackathon.
We are forwarding this opportunity to the Pilot League (@Salome@emixprime), suggesting the evaluation of a possible budget allocation to sponsor further prices.
The event will start in 5 days, and the earlier we provide structured grants the better is for visibility and applications.
Grants could not be focused on core Idle functionalities nor require their deep understanding, but at the same time, their development should add value to the Idle ecosystem.
Here below we would like to propose some ideas that might be sponsored through these 3 possible grants:
Flash Loans Use-Case – this feature (which will be released with next update), is ready to unleash the potential of Idle liquidity with many different applications, unlocking flash loans execution on liquidity allocated in Compound+Aave+dYdX.
On-Top Strategies – development of strategies on top of Idle protocol, such as automatically reinvesting yield profits into other assets (e.g. ETH, WBTC) or improve current yield spectrum for Idle allocation strategies (add more supported protocols or LP pools).
Tranches POC – Design a product with the minimum requirements needed to enable tranches on top of Idle protocol.
The list is open to other initiatives, bearing in mind the rationale and the limited slots available.
To endorse/reject this idea or if there’s any improvement/idea you wish to talk about further, drop a comment down here!
Clearly flash loans have a lot of opportunity, but as they have been used in almost every high profile hack we’ve seen recently, it makes me really nervous.
you are not the only one that gets nervous with flash loans.
i would like to have more info from @Teo and @william about that are the advantages of adding them to the protocol.
The way I see it is that everyone gets flash loan hacked sooner or later because there are always new or advanced attack vectors.
On top of introducing (possible?) higher risks to Idletokens (assets pools) I also would like to know if enabling flash loans will introduce a new attack vector to IDLE governance.
I am very very extremely skeptical about allowing flash loans on Idle specially when ETH L2 solutions seem to be on the pipeline soon. For an non tech degen like me that actually raises a new question: will L2 introduce new attack surfaces for flash loans?
@Teo great to have Idle sponsoring gitcoin! I am a BIG fan of the project and the amazing community.
Question: The pilot committee budget is 5k $IDLE until April.
Our rockstar Emiliano Bonassi is much deservedly getting $3.5k IDLE and the analytics page grant is 0.4k $IDLE.
That leaves 1.1K $IDLE for 3 gitcoin grants (including a Tranches POC) and committee operations and expenses for another month.
Am I missing something here?! Seems kinda tight budget to me
I understand your concerns, and I’d like to make a couple of things clearer – flash loans would enable users to borrow instantly and easily, with no collateral needed, as long as the liquidity is returned to the pool within one block. If this does not happen, the whole transaction is reversed to effectively undo the actions executed until that point. This guarantees the safety of the funds in the pool. Use-cases include arbitrage, collateral swapping, self-liquidation, and many more.
Hence, implementing flash loans in Idle would not constitute an attack vector because Idle protocol would offer a flash loan service. In all previous hacks/exploits that happened in DeFi, flash loans were a medium (and amplifier), not the root of the hack.
For flash loans directed to Idle, we have a safeguard insofar it’s not possible to mint&redeem idleTokens within the same block.
I’m sure @william can definitely add more color to this from a technical perspective!
We got your back on that as reported in the Emiliano’s bounty post:
But the point you brought up gives us another signal that we should start a recurrent reporting for budget/expenses for Leagues and Protocol. We are working on that
Therefore, the current budget that the League can dedicate to this initiative (+ committee operations) is currently 4.6k $IDLE.
Regarding flash loans, it’s just a new service that we can offer on top of the current ones using the liquidity that we already have and it will allow basically two things: increased APY for the current lenders and increased protocol fees. All of this is possibile thanks to fee generated by flash-borrowers.
The implementation, which is actually ready, it’s for sure something that should be audited and reviewed, but this new method in the contract does not make us more vulnerable to flash loans attacks specifically, it just offer our liquidity with the constrain that it is returned (+ fees) atomically at the end of the tx.
Btw if we take a look at the flash loans fees generated in aave v1, we have that 50% of the whole protocol fees from aave are generated thanks to flash loans
getting $3.5k IDLE and the analytics page grant is 0.4k $IDLE.
as reported in the Emiliano’s bounty post:
