V2 Discussion: Pools/assets and AllowedList Policy for V2

Motivation

Gearbox V2 has passed external audits and is about ready for deployment on Mainnet.

V2 includes integrations with Lido, Curve, Convex, and Yearn protocols and allows new leveraged strategies for high-yield farming and trading. Those protocols have well-established processes, reliable infrastructure as well as strong community support.

The V2 strategies involve assets that can be leveraged using Curve, Convex, and Yearn:

Token Address
yvUSDC 0xa354F35829Ae975e850e23e9615b11Da1B3dC4DE
yvDAI 0xdA816459F1AB5631232FE5e97a05BBBb94970c95
yvWETH 0xa258C4606Ca8206D8aA700cE2143D7db854D168c
yvWBTC 0xA696a63cc78DfFa1a63E9E50587C197387FF6C7E
yvCurve-stETH 0xdCD90C7f6324cfa40d7169ef80b12031770B4325
yvCurve-FRAX 0xB4AdA607B9d6b2c9Ee07A275e9616B84AC560139
steCRV 0x06325440D014e39736583c165C2963BA99fAf14E
cvxsteCRV 0x9518c9063eB0262D791f38d8d6Eb0aca33c63ed0
stkcvxsteCRV 0x2210aa245Bf766eE99325c607807A08e636B5173
FRAX3CRV-f 0xd632f22692FaC7611d2AA1C0D552930D43CAEd3B
cvxFRAX3CRV-f 0xbE0F6478E0E4894CFb14f32855603A083A57c7dA
stkcvxFRAX3CRV-f 0x2AF29502110080081FDF726dfBf61ABE3bA9Ef3C
3Crv 0x6c3F90f043a72FA612cbac8115EE7e52BDe6E490
cvx3Crv 0x30D9410ED1D5DA1F6C8391af5338C93ab8d4035C
stkcvx3Crv 0x2eD0f32d7C8b0f7EA7E40277C62Fb9C5DE092003
LUSD3CRV-f 0xEd279fDD11cA84bEef15AF5D39BB4d4bEE23F0cA
cvxLUSD3CRV-f 0xFB9B2f06FDb404Fd3E2278E9A9edc8f252F273d0
stkcvxLUSD3CRV-f 0x77e6290D1779B606235407fdf37A14D94D0DFB40
crvPlain3andSUSD 0xC25a3A3b969415c80451098fa907EC722572917F
cvxcrvPlain3andSUSD 0x11D200ef1409cecA8D6d23e6496550f707772F11
stkcvxcrvPlain3andSUSD 0xd622AD90386BBf0310668175f76eD958030E3635
gusd3CRV 0xD2967f45c4f384DEEa880F807Be904762a3DeA07
cvxgusd3CRV 0x15c2471ef46Fa721990730cfa526BcFb45574576
stkcvxgusd3CRV 0x074f66aE6e28f7e01DFe598ECbfbd3034cf3De47
sUSD 0x57Ab1ec28D129707052df4dF418D58a2D46d5f51
FRAX 0x853d955aCEf822Db058eb8505911ED77F175b99e
gUSD 0x056Fd409E1d7A124BD7017459dFEa2F387b6d5Cd
LUSD 0x5f98805A4E8be255a32880FDeC7F6728C6568bA0
stETH 0xae7ab96520DE3A18E5e111B5EaAb095312D7fE84
CRV 0xD533a949740bb3306d119CC777fa900bA034cd52
CVX 0x4e3FBD56CD56c3e72c1403e103b45Db9da5B9D2B
FXS 0x3432B6A60D23Ca0dFCa7761B7ab56459D9C964D0
LDO 0x5A98FcBEA516Cf06857215779Fd812CA3beF1B32
SNX 0xC011a73ee8576Fb46F5E1c5751cA3B9Fe0af2a6F
LQTY 0x6DEA81C8171D0bA574754EF6F8b412F2Ed88c54D

All of the assets conform to main risk requirements: deep DEX liquidity, the existence of Chainlink price-feed for underlying tokens, and a viable tokenomic model.

DEX Liquidity can be tracked using the risk-committee report: Gearbox Credit Accounts

Chainlink price-feeds: Decentralized Data Feeds | Chainlink

To mitigate the risks of malicious exploitation, V2 will be gated on the first phase using the set of whitelisted addresses (Leverage Ninja mode). To bootstrap TVL, whitelisted participants have committed to a minimum $50k entry.

Given V2 is around the corner with a tentative ETA soon after the Merge, it’s crucial to consider all the associated risks and decide on the Allowed List policy for V2. The new parameters aim to give greater leverage ability for the less risky collateral assets as well as to reduce leverage for the more risky ones.

Proposal

Taking into account V1 experience and expectations from the upcoming V2, I propose changes as below:

  1. Create a new pool: stETH 0xae7ab96520de3a18e5e111b5eaab095312d7fe84 with the same parameters as for the ETH pool. This would help to attract liquidity from stETH holders and also allow less risky sTETH borrowing and bigger leverage when using stETH as collateral.

The pool parameters have to be adjusted to satisfy the expected demand during gated Leverage Ninja mode. These are the proposed parameters for pools:

Pool Min Borrow Max Borrow
WETH 25 ETH 1000 WETH
stETH 25 stETH 1000 stETH
WBTC 2 WBTC 100 WBTC
USDC 50k USDC 2M
DAI 50k 2M

Pool Max: unlimited for all the pools.

  1. Set up Asset LTs as below for V2 assets:
Token USDC pool (%) DAI pool (%) WETH pool (%) stETH pool (%) WBTC pool (%)
WETH 85 85 93 90 85
stETH 85 85 90 93 85
WBTC 85 85 85 85 93
USDC 93 92 85 85 85
DAI 92 93 85 85 85
USDT 90 90 82.5 82.5 82.5
sUSD 90 90 82.5 82.5 82.5
FRAX 90 90 82.5 82.5 82.5
gUSD 90 90 82.5 82.5 82.5
LUSD 90 90 82.5 82.5 82.5
steCRV 82.5 82.5 90 90 82.5
cvxsteCRV 82.5 82.5 90 90 82.5
stkcvxsteCRV 82.5 82.5 90 90 82.5
FRAX3CRV-f 90 90 80 80 80
cvxFRAX3CRV-f 90 90 80 80 80
stkcvxFRAX3CRV 90 90 80 80 80
3Crv 90 90 80 80 80
cvx3Crv 90 90 80 80 80
stkcvx3Crv 90 90 80 80 80
LUSD3CRV-f 90 90 80 80 80
cvxLUSD3CRV-f 90 90 80 80 80
stkcvxLUSD3CRV 90 90 80 80 80
crvPlain3andSUSD 90 90 80 80 80
cvxcrvPlain3andSUSD 90 90 80 80 80
stkcvxcrvPlain3andSUSD 90 90 80 80 80
gusd3CRV 90 90 80 80 80
cvxgusd3CRV 90 90 80 80 80
stkcvxgusd3CRV 90 90 80 80 80
FraxUsdc 90 90 80 80 80
yvDAI 90 90 80 80 80
yvUSDC 90 90 80 80 80
yvWETH 85 85 93 90 85
yvWBTC 85 85 85 85 93
yvCurve-stETH 82.5 82.5 90 90 82.5
yvCurve-FRAX 90 90 80 80 80
CVX 25 25 25 25 25
FXS 25 25 25 25 25
LQTY 0 0 0 0 0
CRV 25 25 25 25 25
LDO 0 0 0 0 0
SNX 25 25 25 25 25

LTs (Liquidation thresholds) above address the demand for higher leverage on base assets and stablecoins and reflect the absence of interest on the majority of the tokens in V1 so far. It is expected that CVX, FXS, LQTY, CRV, LDO, and SNX would be used as farming rewards rather than leveraging trading on them, therefore high LT values are unnecessary. This can be reconsidered later if there will be proven demand for higher leverage.

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Overall LGTM.

But I got a small question, in point 1 of the proposal

  1. Create a new pool: stETH 0x6b175474e89094c44da98b954eedeac495271d0f with the same parameters as for the ETH pool. This would help to attract liquidity from stETH holders and also allow less risky sTETH borrowing and bigger leverage when using stETH as collateral.

What is 0x6b175474e89094c44da98b954eedeac495271d0f ?

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ye, seems incorrect… should be staked Ethereum address 0xae7ab96520de3a18e5e111b5eaab095312d7fe84, right @amantay ?

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Oh, great catch thank you!
Edited.

re borrow limites:
the minimum borrow amount must be calculated so that liquidations to be profitable

Unwrapping withdraw Convex > withdraw Curve LP >> swap to underlying if necessary >> closing credit account costs 1.3-1.5M gas (@harshjain pls correct me if i’m wrong). that means liquidator pays for liquidation:

Screenshot 2022-08-22 at 13.52.25

^^ these calculations are made for actual eth price. 500 Gwei gas price looks decent - gas price is not so high as in 2021 now, but still could peak in the days of big sales…

if eth goes up (eth price = 3k), then eth consumed ~2.2k$. respectively, even at 4% liquidation premium limits for USDC/DAI sounds good for me…

but for stETH & ETH : maybe it’s worth to increase it to 30stETH/ETH (also approx ~50k$)?

Crypto prices are pretty volatile these days, but V2 is going to be released after the Merge, hopefully even 25ETH will worth more than $50k :slight_smile: But I see your point and tend to agree.
We could reconsider the pool limits it after Leverage Ninja though, can’t we?

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sure, we can do it after Ninja mode

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Another important note to add.
We have had pools capped for V1. To address V2 demand I propose to remove pool max limits for Leverage Ninja mode period. We could reconsider and set the new limits up after whitelisted period.
Thoughts @ilgiz @Van0k @mugglesect @BYLI @ivangbi?

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Scuzi changed the number (17) as this one needs a while to be discussed.

Will the Yearn pools be the same as Curve pools, as well as Convex? So 7 new ones everywhere? I would assume that’s logical given that putting LP tokens into “dummy staking” is actually fairly trivial?

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Oh, I listed them in the LTs table, but forgot to add to the pools and tokens ones.
Let me update it

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I’ve updated the pools and the tokens tables - added yearn USDC and DAI pools @ivangbi @ilgiz

So the Yearn article should mention 7 vaults, not 5 - right?

Changed LT for LQTY to 0 as there is no chainlink price-feed so far

6, actually:
yvUSDC,
yvDAI,
yvWETH,
yvWBTC,
yvCurve_STETH,
yvCurve_FRAX

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Hey @Van0k,
Can you list the pools for v2 including Convex ones please?
We need to include them all in this proposal, I think

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Hey Van0k

So support for these yearn vaults aren’t being added?

3pool yVault
Curve LUSD Pool yVault
Curve SUSD Pool yVault
Curve gUSD Pool yVault

I would’ve thought at least the 3pool yVault would be added since the FRAX + 3Pool yVault already contains exposure to the same 3pool.

Can you confirm that none of the above are being added (in this round)

I don’t think it’s hard to add more yearn pools as they are identical… @Van0k @mikael correct or no?

It’s not about hard, it’s about what is actually READY at first launch phase

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Currently planned pools:

Curve:
3CRV
steCRV
SUSD
FRAX3CRV
LUSD3CRV
GUSD3CRV

Yearn:
yvUSDC
yvDAI
yvWETH
ywWBTC
yvCurve_STETH
yvCurve_FRAX

Convex:
All of the Curve pools above

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