Draft OIP-28 - Pilot Deposit into Gro Protocol

Charlie-Gro

Don_G_Lover We built Gro to be diversified and protected while also generating yield. Sounds like a great fit for Olympus DAO 😊

gnostication

Charlie-Gro

Stop supporting USDT.

xh3b4sd

Thank you for the proposal. I made a little risk analysis of the Gro protocol and was concerned for various reasons that may be debatable. My suggestion was to start with 100k and to my surprise I find this proposal to suggest 500k investment. I personally find this too high and would have appreciated to be kept in the loop upfront. Therefore I am voting against this now, because I think the amount of funds is too big for this particular partnership at this particular point in time.

laughing_Monk

Interesting xh3b4sd can you please share your risk analysis ?

0xFelix

I would support testing this new protocol but not with 500k DAI as suggested. Back when OIP-14 was up for a vote there were a lot of concerns about the newness of Convex and so the deposit there was limited to only 333k FRAX. For reference, Convex has >$8 billion assets locked (at the moment) while Gro only has $10 million TVL. So if we have concerns about depositing a lot of treasury assets in a protocol that has billions locked, I don't think we should be depositing even more stablecoins in a completely new and untested protocol.

Also, according to the website, PWRD only yields 4.59% currently which pales in comparison to other opportunities in the market. (Again, for reference, our treasury FRAX on Convex is earning 24.37%.)

So I would support an allocation of max 100k DAI but otherwise I think there are better opportunities in the market for our stablecoins.

111-altrektcrew

0xFelix I would support testing this new protocol but not with 500k DAI as suggested. Back when OIP-14 was up for a vote there were a lot of concerns about the newness of Convex and so the deposit there was limited to only 333k FRAX. For reference, Convex has >$8 billion assets locked (at the moment) while Gro only has $10 million TVL. So if we have concerns about depositing a lot of treasury assets in a protocol that has billions locked, I don't think we should be depositing even more stablecoins in a completely new and untested protocol.

Also, according to the website, PWRD only yields 4.59% currently which pales in comparison to other opportunities in the market. (Again, for reference, our treasury FRAX on Convex is earning 24.37%.)

This alone makes it a NO for me, I would rather **ADD to our Convex Stack

hit (yes) by accident, we need a check response button**

Deathgun

Gro is ❤️

Joyce

Hey this is Joyce from Gro. Wanted to jump in and provide some more information :-)

PWRD yields 7-day average are at 6.5% which is all from base yield i.e. no token incentives included yet. It is lower than other protocols as it's designed to be a highly safe and protected environment with risk diversification and risk tranching in place, so to ensure the treasury balance would be protected from tail risk such as failure of a major stablecoin or protocol (the full list of protocol and stablecoin exposure is at the bottom of our dApp).

The total yield will include token incentives once our Gro DAO token launch (via an LBP) is completed this month, at which point we will be able to start rewarding liquidity providers - including our treasury customers!

We think it's a good place to start with getting ~1.5% of Olympus' DAI to start earning yields while miniminising risks :-) Happy to answer questions and address concerns here!

0xFelix

Joyce I think a better way of looking at this proposal, and to evaluate what your asking, is to look at current stablecoin allocations for the Treasury. Current we have:

1m DAI in Aave - Aave has $14 billion TVL

330k FRAX in Convex - Convex has $8 billion TVL

You're asking for 500k DAI - Your TVL is $10 million

So yes it might only be 1.5% of Olympus' DAI but it would be a significant allocation from the treasury compared to existing positions. Also I think the "minimizing risks" is a bit of a red herring since your protocol is not battle-tested yet while Aave and Convex have a long history already (in DeFi terms obviously) - so you could argue that your protocol has a higher risk profile than Aave and Convex regardless of your asset strategies.

Again, I'm not saying I'm against depositing DAI in Gro but considering the above I think 100k DAI should be the max allocation for now until Gro is more battle-tested.

deficorner

Joyce The total yield will include token incentives once our Gro DAO token launch (via an LBP) is completed this month, at which point we will be able to start rewarding liquidity providers - including our treasury customers!

This one pretty juicy opportunity on top stable yields with risk tranching from Gro

Tao

As a BUIDL , I am more concerned about the security of the protocol ! Can you share the audit report and the contract code plz

Joyce

Tao of course - here are our audit reports from Peckshield and Kurt Barry (Fixed Point Solutions)
https://docs.gro.xyz/gro-docs/how-it-works/security-and-audits/audits

We also have a bug bounty program with Immunefi and held a $100k security audit contest with Code Arena. Check out this page for more details together how we prevent common smart contract attacks here: https://docs.gro.xyz/gro-docs/how-it-works/security-and-audits

At the moment we don't have a public repo yet, but our contracts are verified on etherscan - see our contract addresses here: https://docs.gro.xyz/gro-docs/developer-apis/contracts

If you have any further questions I can also connect you with our dev team on discord :-)

DefiWolf

Thanks for sharing. But $500K DAI is too much for this new protocol. Let’s start with$ 100K for now. Also it will be good to increase our FRAX position in Convex.

Makiaveli

As 0xFelix pointed out, its not low risk, i think we should start with 100k

theswanwar

0xFelix couldn't have put it better.

0xChimp

I agree in principle with this proposal.

Most of the disagreement comes from newness of the protocol and the size in relation to cvx and aave - but the answer to this should surely be to increase our allocation to those other yield strategies because by now they represent a small % of the treasury. As for the security, it is a risk. So maybe 100k for Gro initially and increasing the AAVE and CVX strats by 2-3x would be the right balance at this time.

hippopotamus

+1 towards doing this at $100K.

thejfrog

$100k allocation seems more appropriate given the circumstances.

Despite the audit, a valid low IQ argument is that smart contract risk is always higher with low TVL products--they're not big enough to catch an exploiter's attention yet.

No reason for Olympus to stick its neck out like this for low yield imo, the ask is too high at $500k.

balotelli45

Personally agree with the sentiment shared by others. I would be in favor of depositing a lower amount while building the relationship with GRO. We could always revisit in some time when their TVL grows and we have a bit more confidence in their contracts.

graadient

heya! We'd love to be grohmies :-) Whether starting with 100k or 500k, we're here to build an enduring relationship and collaboration. I think it's a fair point around multiple audits and risk tranching protection only going so far - ultimately a protocol needs to endure with significant funds to prove it has resisted real hack attempts.

There's an interesting bigger conversation around treasury management which would be great to engage in and something that we think about for our own treasury, and not just as builders of a product that offers leverage and protection.

zulqarnain

In addition to what others have pointed out about 500k DAI being too high of an allocation. In my view this proposal goes directly against OIP-20. OIP-20 clearly says that the excess DAI will be allocated in pre-approved protocols. AFAIK the community has not voted to whitelist Gro. Here's the relevant statement from OIP-20.

"The proposal laid out below is to give the DAO the mandate to allocate up to 33% of excess reserves into whitelisted protocols approved by the community (currently Aave, Convex, and Sushiswap)."

personally would like to first see a whitelist vote for Gro which includes a risk-assessment analysis and then would consider voting on the amount to be allocated if the whitelist vote passes. Yes, it'll slow things down, but in my view we shouldn't be in a rush about this.

Given the above concerns, I'm voting No.

Don_G_Lover

zulqarnain hey thanks for the feedback!

The purpose of this draft is to Pilot a new protocol (which with OIP-20 we will have to do slowly over time).

great to see the feedback and see community sentiment! I encourage folks to review this:

https://docs.gro.xyz/gro-docs/gro-products/pwrd/deposit-protection