Introducing Integrations Standard Requirements

đź—‚ Proposals đź’ˇ Ideas & Improvements
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Authors: @Davide, @Teo, @william

Abstract

Inspired by Yearn Safe Farming Committee, this post aims to set the minimum standard requirements needed to implement a new yield source or an asset in Idle protocol.

The standards reported in this guideline will have the goal of helping the Idle community, builders, protocol founders, and Idle liquidity providers to perform adequate due diligence on the current and future yield generating integrations and infrastructures.

Motivation

One of the unique benefits of DeFi is the interoperability and composability among the many different protocols and applications.

Having multiple assets and protocols integrated with the Idle ecosystem is a continuous goal for our protocol, and we gladly had many other projects and founders reaching out to integrate their products into Idle strategies.

Yet, Idle is based on battle-tested protocols, but at the same time new opportunities might arise and we should define an impartial set of directions and standards to evaluate new possible yield improvements.

This guideline would represent an onboarding process for new partners that want to get integrated into Idle, and current/prospective liquidity providers would get a clear overview of the Idle vision on protocol infrastructural changes. Furthermore, builders who would like to work on new implementations via Grants Program Framework would be guided in proposing ideas aligned with protocol goals.

Due Diligence Process

Goal: when a new integration proposal comes up in the Idle forum, the proposer should respect the safety criteria down below.

This due diligence process could drive the community on many decisions: integration into Idle, grant matching/request, liquidity incentives, coverage proposals, and whatever puts Idle brand&funds at risk.

Mandatory safety criteria:

Category Metric Minimum requirements
Audit and due diligence Has a reputable company audited contracts, or are they fork of audited projects? 1 custom audit
Months of activities since first contract deployment 6 months
Months of activities since last contract update 3 months
Are contracts immutable or upgradeable by admins? If upgradable, how many admins control the keys, and are they anonymous? Immutable preferred, but evaluated case by case
Is there an emergency exit plan? Evaluated case by case
Are there protocol dependences? Evaluated case by case
Has the protocol/asset suffered losses in the past? Evaluated case by case
Performances Current protocol TVL or asset circulating supply $ 50M+
Expected TVL/supply in 3 months $ 100M+
Current protocol’s or supported services’ APYs +30% than Idle 30-day strategy average
Would Idle asset liquidity affect APYs? Less than 10%

Next Steps

At the time of writing, Governance can use this framework to evaluate new market opportunities. In the future, the security assessment could become one of the tasks assigned to a possible Yield League.

We aim to improve and update this guideline along with Defi market growth and evolution.
If our community has any suggestion for more metrics to add to the table as indicators of good/bad protocol&asset health, we’re looking forward to hearing your thoughts!

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This is definitely a good reference that can be used when talking with potential B2B partners.

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Give that we will be looking to expand integrations, I think having a solid & standard criteria through which to assess future partners and integrations is really important.

I think this is a solid proposal for the league committee to use when evaluating partners against common metrics

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@Davide @Teo @william
back in November 2020, Idle itself would not meet those criteria… if someone in the same situation like Idle was, back last year, is not eligible for partnership with us, something can be improved.

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Thanks @unicornio for the feedback.

This framework aims to set standards for protocols and assets willing to be integrated into Idle, and not liquidity providers or integrators that could use Idle as a yield source in a permissionless way (and benefit from B2B Affiliation program).
Grants, bounties, and collaborations are welcome at any level, while before putting millions $ in a protocol for any reason, the Governance should pursue adequate due diligence.

This suite of metrics could help the community to make wise decisions, it’s not a binding rule written in stone. The community can approve initiatives with protocols that do not follow the guidelines, but risks are more evident if many points are missing.

Which parameter are you specifically pointing out and what is a possible change in your opinion?

In retrospect, the lines “This due diligence process could drive …. whatever puts Idle brand&funds at risk.” might seem to block any interaction with protocols and we can mitigate it with a more generic form: “This due diligence process could drive the community on decisions that affect core operations and infrastructure.”

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+1
6 months is a lifetime in DeFi… maybe that can be revised.

50M tvl will exclude sexy, innovative new protocols because many times (for safety reasons, even audited) their vaults are capped at values smaller than 50M at the start of production.

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In my opinion, the “Months of activities since last contract update” is the main parameter, as hacks usually happen in that timeframe. The track record is a good added value but not so crucial.
With the security concerns in mind, we might delete “Months of activities since first contract deployment”, holding the last contract update timeframe as the only strong requirement.

Good point. According to DeFiPulse, the top 50 protocols reach the $50m TVL, while the remaining 50 services are below this line (with the last 25 sub $10m).
Bearing in mind that our liquidity might heavily affect the APYs of the target protocol, how far could we reduce the threshold?
Personally, I would prefer to consider these cases as “exceptions” instead of lowering the threshold too much, but happy to hear more analysis on that!

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+1

10M seems to be pretty standard these bull days.

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@Coinballers @unicorn thanks for your feedback :raised_hands:

:writing_hand: We can now proceed with the snapvote.

:arrow_right: Please cast your vote for Integrations Standard Requirements: HERE

:alarm_clock: The snapshot will last for 3 days, until 2021-05-20T19:00:00Z

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To close and formalize this post: the community approved the framework via snapshot poll, adding this tool to the suite of documents for interacting and participating in Idle ecosystem.

This post is the final version that will be used as a reference.

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