This proposal is to approve the budget for Leagues M4-2023 (October to December 2023) contributors and operations, and a brief outline of the achieved milestones for M3-2023 (more details will be released in the upcoming M3-2023 Performance Report).
M3-2023 has been a consolidation around the product market fit that Yield Tranches are demonstrating over time. Institutional lending pools have been growing in TVL, and the interest from professional asset managers has been rising on both lending and borrowing sides. More and more institutional lenders are interested in bringing their off-chain deals into on-chain risk-diversified pools, and borrowers have been given the possibility to operate over a much wider liquidity and flexible terms.
Despite a pushback on boosted pool collaboration due to a Balancer vulnerability, we amplified our security framework with an additional round of audits with Code4rena researchers and with Hypernative to automate monitoring and response ops. Icing on the cake, we have been completing a new L2 expansion plan (that we’re going to announce soon™) that would create a massive opportunity for liquidity to flow in.
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.
- Yield Tranches zkEVM release
- Credora Yield Tranches integration
- Liquis incentives partnership
- IDLE 8020 pool in Balancer
- Hypernative monitoring integration
In anticipation of a more comprehensive analysis of the performance and metrics with the upcoming M3-2023 Performance Report, below is an overlook of the TVL and fees for Idle DAO for the past quarter:
Average TVL has been $38.1M (+13.7% wrt M2-2023), with peak of $43M.
Overall $87.13k has been accrued by the product suite (+67% QoQ growth). Of the aggregated fees, 85.9% is coming from YTs and 14.1% from BY strategies.
The performance report for the current period will be released in the coming days, providing a more detailed look at the balance sheet and income statement for Idle DAO. This report will give our tokenholders a better understanding of the financial health and performance of the DAO and its product suite.
For the next quarter, we are going to announce a series of expansion plans into other L2s – don’t want to spoil anything for the users and community, but it’s something we’re very excited about. Be on the lookout, more details are coming soon.
We are planning to release a revamp the stkIDLE staking module, starting from the brainstorming started in this post during the last mandate. It will involve an higher synergy between product suite users and IDLE holders, giving de facto a prime access to additional features and benefit.
As we are in the process of horizzontally expanding Yield Tranches’ underlying sources, we found an interesting feedback from users for corporate bonds – this seems to be a natural fit with Yield Tranches’ value proposition, as would allow to create segments of a pool of different bonds (ETF-like, to insulate the default risk) that are divvied up by sector, time to maturity, or other characteristics in order to be serviceable to different risk profiles.
Another type of yield source that could be a fit for Yield Tranches is option liquidity pools: in this yield source, liquidity providers provide stablecoin collateral to the vault. This collateral is used to collateralize options that are sold to liquidity takers. Liquidity providers receive yield from the premiums of the options sold. As options are hedged by either selling options or opening other positions to shift delta to neutrality, the liquidity providers should attain uncorrelated and delta-neutral yield. However, due to various factors, the reality is that most of these option liquidity pools are in loss – this is where the Senior/Junior duality can enter into action and create diversified access to these pools, allowing liquidity providers to really hedge against their drawdown risk.
We are researching over a new form of Yield Tranches that would give users the reins to their yield. This can open up the product suite to applications like fixed yield and leveraged long yield. Either by developing an in-house solution or by collaborating with other yield trading in the space, we want allow our users to create another level of customization for their yield portfolio.
The expected budget for M4-2023 is $100,275 in stablecoin and 199’100 IDLE (using a 20-day rolling price at the time of writing).
The Treasury League multisig stablecoin holdings currently stand at $144,363 and 19’369 IDLE so if the Temperature Check for IDLE tokenholders is positive, 179’731 IDLE will be transferred from the Ecosystem Fund via the next IIP.
All Idle DAO stakeholders and the Ethereum community are invited to weigh in on the proposal. This proposal will be followed by a Temperature Check vote with the published here, when ready.
If positive, the M4-2023 mandate will be officially approved, and the budget transfer will be included in the upcoming IIP.