[GIP-47] Add MIM, Curve MIM and Convex MIM pools

[apeir99n]

Abstract

This is proposal to add Abracadabra’s MIM (MIM) token as well as Curve MIM3CRV and Convex MIM3CRV as available strategies for all the current (and soon upcoming FRAX) passive pools.

Motivation

With USDC and DAI comprising most of Gearbox Protocol passive pool side, there are only a number of strategies currently available to deploy the assets into: mostly fluctuating between GUSD, sUSD, and LUSD farming. See for yourself in these pre-made multicalls that save leverage users time. As the APY on those naturally fluctuates due to how Curve pool gauges get distributed, it’s interesting to increase the product offering so Ninjas have a wider range to choose from. On that note, MIM strategies have long offered attractive APYs while sticking to their $1 peg consistently enough.

Gearbox Protocol Dashboard

While utilization of passive pools has been through the peak, this doesn’t per se offer more TVL growth opportunities - but instead, possibly diversifies the protocol collaterals: Risk DAO | risk management dashboard. On collaterals, see this docs section: PRO: Leverage Bible - Gearbox Protocol.

Specification

The proposed parameters are:

• add MIM (0x99d8a9c45b2eca8864373a26d1459e3dff1e17f3) as allowed token to FRAX, DAI, USDC, WETH, WBTC and stETH pool’s Credit Managers.
• add Curve MIM3CRV pool contract (0x5a6a4d54456819380173272a5e8e9b9904bdf41b) as an allowed contract.
• add Curve MIM3CRV pool token (0x5a6a4d54456819380173272a5e8e9b9904bdf41b) as an allowed token to FRAX, DAI, USDC, WETH, WBTC and stETH pool’s Credit Managers
• add Convex pool contract (0xFd5AbF66b003881b88567EB9Ed9c651F14Dc4771) as an allowed contract.
• add Convex cvxMIM3CRV pool token (0xabb54222c2b77158cc975a2b715a3d703c256f05) as an allowed token to FRAX, DAI, USDC, WETH, WBTC and stETH pool’s Credit Managers
• set Liquidation Threshold as:

Token	USDC pool (%)	DAI pool (%)	WETH pool (%)	wstETH pool (%)	WBTC pool (%)	FRAX pool (%)
MIM	80	80	80	80	80	80
MIM3CRV	85	85	80	80	80	85
cvxMIM3CRV	85	85	80	80	80	85
stkcvxMIM3CRV	85	85	80	80	80	85

Price Feed

Set price feed as ChainLink’s oracle for MIM and Gearbox’s Curve and Convex pricing contracts for MIM3CRV and cvxMIM3CRV/stkcvxMIM3CRV. See how other Curve pool oracles work here.

Risks and Explanation

MIM previous collaterals and bad debt

Since the time of UST and FTT, which had a large share among MIM collateral assets, their current composition looks much much better: MIM Dashboard. With that being said, the protocol could be argued to still have potentially about 5.5% bad debt. Therefore, the max LTV for LP tokens is set up at 85, leaving a good gap for liquidations.

85 LTV max leverage and why 80 on others

The LP tokens in Curve and Convex have much less volatility compared to a regular MIM as an asset. Moreover, that will likely be the final destination for gearbox leverage users. As such, having higher LTVs for LP tokens while lower LTV allows for great leverage farming yet not over-exposing to risks.

This would allow for 5x+ farming with yet a safe-enough Health Factor. Anyway, the risks are up to every user individually. See more in how to calculate that in the docs.

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References

1. https://abracadabra.money/
2. Documentation - Introduction - User's Documentation and Dev Intro
3. Chailink oracle: MIM / USD | Chainlink
4. Contracts & Audit: Our Contracts - User's Documentation, https://www.certora.com/wp-content/uploads/2022/02/SushiBentoboxFeb2021.pdf
5. Twitter - https://twitter.com/MIM_Spell

Edit Feb-13:

Voting

https://snapshot.org/#/gearbox.eth/proposal/0x3cbd5027fa235f8742cb89c06afe8ea9ce6c1e9cda90b733e619dff8b88e210b

[nonstopTheo]

Posting this on behalf of RiskDAO

Additional comments from RiskDAO

MIM is an overcollateralized stablecoin issued by Abracadabra Money. The stablecoin has a circulating supply of $105m, but has come off significantly higher levels in the wake of the 2022 market collapse.

Abracadabra’s TVL (and MIM market cap) have endured a number of events in 2022:

• Revelation that Sifu is the project’s treasurer/co-founder
• UST depeg: MIM had a large Curve-pool with UST
• FTX bankruptcy

Abracadabra TVL, Source: DefiLlama

MIM market cap, Source: CoinGecko

On a shorter time-scale, MIM market cap has recovered from the recent lows. Simultaneously, collateral quality has improved.

MIM market cap, Source: CoinGecko

93m of all MIM (88%) has been issued on Ethereum mainnet, with the remainder on Arbitrum.

MIM is a typically DeFi-asset and primarily traded on DEXes, especially in the MIM-3CRV pool on Curve.

A sell order of 54m MIM would result in 4%-slippage.

Given the market turmoil, MIM has lost its peg in 2022 but has since recovered.

MIM price per block; Source: Curve.fi

The RiskDAO bad debt dashboard shows that Abracadabra has about $8.1m in bad debt outstanding. This comes from UST liquidations in the wake of the UST collapse, resulting from significant exposure in Abracadabra’s “Degenbox”.

The bad debt is one of the key reasons why MIM gets lower parameters than other stablecoins like sUSD.

We agree with the proposed parameters and consider them appropriate given the above discussion.

[ov3rkoalafied]

Just want to note that mim’s “peg” is a bit of a misnomer since they have a massive a-factor on their curve pool. They frequently were seemingly on-peg (very close to 1) despite over 90% of the curve pool being MIM.

That being said they’ve made a lot of strides with varying interest rates and other restorative mechanisms to make the pool more balanced - as seen in riskDAO’s screenshot, balance is 55% MIM right now.

I just want to verify that riskDAO /gearbox is evaluating the risk from a pool balance perspective, not a price perspective. Ie, in a $130m liquidity pool, if $110m is MIM, then that’s only $20m 3crv that can be used for liquidations regardless of what peg is.

[RV_ivangbi]

ivangbi 🦞