Update Best Yield USDC, USDT, WETH yield sources

[Biaf]

Authors

Treasury League

Summary

This proposal focuses on multiple initiatives: remove Euler Yield Tranches as yield sources of Senior and Junior Best Yield strategies on USDC, USDT and WETH pools.

References

• Euler incident analysis and exposure breakdown
• Update Best Yield DAI yield sources
• Euler incident: full recovery and distribution plan

Rationale

@Biaf

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 funds deposited on Euler were 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. This post is the first in a series to discuss how to adjust the yield sources of our strategies.

The DAO recently voted to update the BY DAI pool yield sources. Now we want to discuss an update of the underlying markets for the Best Yield strategies on USDC, USDT and WETH.

@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 primary goals in relation to the affected strategies, i.e. Senior and Junior BY on USDC, USDT and WETH and the Euler YTs, are as follows:

• Ensure a secure recovery process for users of Senior and Junior Yield Tranches. The current Euler Senior/Junior Yield Tranches will be deprecated upon allowing all depositors to redeem their funds. […]
• Ensure continuity of Best Yield vaults. Despite the recent challenges with Euler, Senior and Junior Best Yield vaults will continue to operate as usual. The funds recovered from Euler and sent to Senior/Junior Best Yield vaults will be rebalanced across Compound/Aave/Morpho/Clearpool (accordingly to the underlying yield sources of each Best Yield vault) to maintain optimal performance.

Next Step

This proposal is at the foundation of the process to go back to normal activity and re-open the paused products. Recovered amounts will be redistributed across all the respective strategies, allowing users to regain access to standard deposit and redeem operations and reboot all strategies’ functionalities.

This post will be open for discussion, and tomorrow morning, if there are no objections, we will start the governance process with a temperature check leading to the next IIP.

[Biaf]

Temperature check voting

The voting phase to remove the Euler YTs from the Best Yield strategies on USDC, USDT and WETH starts now

• For - Agree with the Euler YTs removal from BY on USDC, USDT and WETH
• Against - Disagree with the Euler YTs removal from BY on USDC, USDT and WETH
• Discuss more - Discuss more the Euler YTs removal from BY on USDC, USDT and WETH

Poll for $IDLE holders: HERE
Poll for $IDLE stakers (stkIDLE holders): HERE

Polls will close on 2023-04-23T16:30:00Z

The final $IDLE voting weights will be calculated using the approved calculator .

Looking to delegate your vote on Snapshot? Follow the official Snapshot guide.

Let your vote count!

[Biaf]

Temperature check results

Temperature Check passed

The proposal to update the USDC, USDT and WETH BY’s underlying markets by removing the Euler YTs will be included in the next IIP!