• General

  • Draft OIP-28 - Pilot Deposit into Gro Protocol

Summary: Following OIP-20, we would like to begin piloting deposits into new partners. Initially, we would like to deposit $500K Dai in Gro Protocol’s risk tranched PWRD vault (secured 300% by their leveraged vault product)

**Motivation:** PWRD is low-risk savings product. Designed to offer safer access to DeFi yields, tokenised as a stablecoin with built-in yield and protection. Its value is backed by three of the most traded stablecoins on the market—DAI, USDC, and USDT—but also protected against problems with any of them.

As Gro Risk Balancer spreads risk across stablecoins, this helps to protect PWRD if one of DAI, USDC, or USDT fails or gets censored. It then offers Deposit Protection, as the risk tranching mechanism means that any loss of capital from stablecoins or yield strategies is first absorbed by the Vault, letting PWRD generate yield more safely.

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

Moreover, Gro presents a forward thinking look at product and enabling the next wave of new defi users. They’ve already secured partnerships with Argent and continue to attract new capital for their products.

We look forward to expanding this relationship following a pilot deposit.  This initial deposit represents <2% of total Dai bonded in the treasury.

**Risks:** Gro is a younger protocol following a guarded launch mode (~$10M TVL). This protocol carries similar composability risks as other yield aggregators but using the PWRD product protects us from various risks including yield platform failures and stable coin peg failures.

Our Dai would remain Dai in this engagement.

Should we begin a pilot deposit program?

    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.

      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.

        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**

          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!

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

              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.

              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 :-)

                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.

                    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.

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

                      $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.

                      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.

                      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.

                      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.