[IIP-33] Update Best Yield DAI yield sources

[Biaf]

Authors

Treasury League and Development League

Summary

This IIP focuses on two proposals with the goal to update the DAI Best Yield’s underlying markets by removing Euler YTs and adding the Clearpool (Portofino) Yield Tranches.

Rationale

1. Remove Euler as a yield source of Senior and Junior Best Yield strategies on DAI

On March 13th, Euler suffered an exploit by a hacker stealing around $200m of funds deposited in the protocol. Euler was one of the underlying markets below Best Yield strategies and Yield Tranches. Part of the funds deposited on Euler was then locked with users unable to withdraw their funds.

With the recent positive events leading to a full recovery of the stolen funds, we can start discussing the next steps of the strategies affected.

@Biaf

Based on internal risk assessment, we suggest to remove Euler from the basket of yield sources of the strategy at least until a new audit check is run. This market could be added again to Best Yield after a re-assessment of the newly audited Euler protocol and via an Idle DAO vote.

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

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

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

@Biaf

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.

Specifications

The code for the IIP-33 can be found on GitHub here and consists of 1 action.

IIP-33 actions:

• 1 action to replace the Euler DAI staking wrapper with the Clearpool (Portofino)'s tranche as a Senior DAI BY yield source

Where the contract addresses are:

• Euler staking DAI AA YTs 0xC9C83bEBd31aff93a2353920F2513D372847A517
• Clearpool (Portofino) DAI AA YTs 0xd325673B928F5C099b510aD63c8A18671773a331

Next Step

The temperature checks for the above proposals have already been successfully closed. We are going to open the on-chain voting phase right after the publication of this Idle improvement proposal.

[Biaf]

On-chain Voting Phase

Cast your on-chain $IDLE vote here: HERE
End date: 2023-04-14T18:00:00Z

$IDLE stakers (stkIDLE holders) can vote here: HERE
End date: 2023-04-14T08:00:00Z

The threshold to make the off-chain poll valid (both metrics should be reached):

• 20% of circulating stkIDLE voting the poll (min. ~148k stkIDLE)
• at least 70% on the same option.

The stkIDLE voting calculator will be used to calculate the final results.

Make sure you have been delegated to participate in this voting round.

[Biaf]

Voting results and IIP queuing

IIP-33 passed with 1,280,925 $IDLE votes in favour and has already been queued for execution