This proposal is to approve the budget and goals for Leagues M1-2024 (January to March 2024) contributors and operations, and a brief outline of the achieved milestones for M4-2023.
M4-2023 marked and cemented the expansion of Idle DAO’s product suite into multiple chains, including Optimism and Polygon zkEVM, with an impressive 10M TVL now established in these new domains. Similar to the preceding mandate, institutional lending pools continued to spearhead TVL growth, reflecting substantial interest from institutional players on both the supply and borrowing fronts. The allure of risk-diversification through Yield Tranches has been instrumental in this trend, leading us to unveil a series of insights that will lead to an exclusive set of Yield Tranches tailored for institutional players and strategies (more on this below).
As the DeFi landscape evolves, the financing of RWAs gains prominence, echoing a prevailing theme in recent quarters. The imperative for risk protection becomes more pronounced for the maturation of this branch of DeFi. In response, we at Idle Leagues are fully committed to constructing a marketplace that will serve as a catalyst for expansion. This initiative aims to enable risk diversification into on-chain lending and borrowing activities, empowering liquidity providers and borrowers to tailor, leverage, or hedge their yield portfolios.
We have been proud to announce significant integration partners, and have been evolving our product suite and DAO structure. Below a closer look at some of the key achievements of the past quarter.
- VaultCraft integrates Yield Tranches
- Amulet integrates Yield Tranches
- Yield Tranches on top of Morpho Blue markets
- MATIC rewards program for zkEVM liquidity providers
- Optimism release and Yield Tranches integration
- New Institutional Credit Yield Tranches with Wincent and Clearpool
- stkIDLE Prime Staking release
In anticipation of a more comprehensive analysis of the performance and metrics with the upcoming M4-2023 Performance Report, below is an overlook of the TVL and fees for Idle DAO for the past quarter:
Average TVL has been $31.6M, with peak of $37.1M.
Overall $84.76k has been accrued by the product suite. Of the aggregated fees, 94.5% is coming from Yield Tranches and 5.5% from Best Yield vaults.
The upcoming performance report for the last quarter of 2023 will provide a more detailed look at the balance sheet and income statement for Idle DAO. The report will give our tokenholders a better understanding of the financial health and performance of the DAO and its product suite.
We believe that DeFi is, and always has been, about disintermediating financial interactions. And we also think it’s inevitable that all private debt will move on chain. All of it. The whole multi-trillion dollar market of it.
For this reason, and thanks to the insightful feedback collected among our users, we believe that Yield Tranches should achieve these goals and expand access to capital, starting from a more direct relationship between liquidity providers and borrowers/strategist.
A new set of Yield Tranches based on this theme is already on the way.
Our friends at Morpho have been building an interesting suite of isolated lending pools that would allow to externalize risk management and allow third-parties to curate parameters such as collateral assets, liquidation LTV, oracles, and caps.
We embrace the importance of this isolated and curated approach, yet it could be prone to risk vectors such as collateral illiquidity or parameters mismanagement. Yield Tranches would be a natural fit here to allow each MetaMorpho vault to effectively cater to a different risk profile, ending the one-size-fits-all approach.
Carrying on our collaboration with Morpho, we plan to leverage the new Morpho Blue infrastructure to spin off a new isolated lending market for Senior Tranches tokens. This initiative borrows out from the repo markets, which are pivotal to the efficient working of almost all financial markets.
Enabling Senior Tranches as collateral would result in the de-facto creation of a new class of tranches (lenders to Senior Traches-collateralized loans can be intended as “Super Senior” – or in a traditional nomenclature, we’d have Senior-Mezzanine-Junior classes), which would allow Senior Tranches holders to have an efficient source of short-term funding and hedge the primary debt issuance.
By end of February 2024, we will close the pilot program for sktIDLE Prime Staking and release a series of consideration and updates to finalize the stkIDLE staking module.
We plan to potentially include into the possible discount new Yield Tranches, allow stkIDLE delegation and the creation of bribes markets to get discount – the latter could be achieved via external bribe markets like Hidden Hand or Paladin.
Given the numerous requests our Dev League is receiving for building Yield Tranches on top of brand new yield sources, we plan to push R&D in order to build a permissionless Yield Tranches Factory.
The Factory will be designed to offer a new trustless primitive with increased efficiency and flexibility compared to existing tranches implementations. It would aim to provide a permissionless risk management and permissionless market creation with yield source agnostic setup. Generally speaking, the Factory would be designed to be a simple, immutable, and governance-minimized base layer that allows for a wide variety of other users to built on top of it.
6) Best Yield Update, RWA Yield Tranches, new zkEVM products, IDLE as Collateral and Further Multichain Expansion
In addition to the above new goals, we will keep developing and improving the current product suite, with a focus on upgrading the current Best Yield underlying yield sources, expanding the Yield Tranches spectrum with RWA assets (with corporate bonds as very first target), and adding a new set of Yield Tranches on zkEVM to finalize the agreed grant.
Additionally, we plan to improve IDLE market liquidity to push for further decentralization and allow use-cases like IDLE as collateral, and approaching new EVM-compatible L2s to expand either IDLE or Yield Tranches, considering potential strategic partnerships and user feedback, to enable our users a 360 onchain experience.
The expected budget for M1-2024 is $94’575 in stablecoin and 83’953 IDLE (using a 20-day rolling price at the time of writing).
At the time of writing, the Treasury League multisig stablecoin or equivalents holdings currently stand at $190’969 and 1’674 IDLE so if the Temperature Check for IDLE tokenholders is positive, 82’279 IDLE will be transferred from the Ecosystem Fund via the next IIP.
All Idle DAO stakeholders and the Ethereum community are invited to weight in on the proposal. This proposal will be followed by a Temperature Check vote with the published here, when ready.
If positive, the M1-2024 mandate (budget and goals) will be officially approved, and the budget transfer will be included in the upcoming IIP.