[Proposal] DWF Labs CRV & YFI partnership


Due to a recent discovered bug in specific versions of Vyper, CRV has been facing biggest challenge with on chain liquidity being drained and potential liquidation of multiple loan positions. DWF Labs has showed our support to CRV community by accumulating 12.5m CRV ($5m), becoming one of the largest CRV holders. Yearn has played a critical role in empowering defi world and we are excited to form a long-term beneficial partnership by deploying part of our CRV position on Yearn together with providing liquidity for YFI on both CEXs and DEXs by requesting 350 YFI ($1.95m) loan from DAO’s treasury.

Who is DWF Labs?
DWF Labs is a leading crypto native investment firm and market maker, seeking to support bold founders who want to build the future of Web3 and ecosystem. DWF Labs is an affiliate of Digital Wave Finance, one of the world’s leading high frequency cryptocurrency trading firm founded in 2018, which is trading on more than 60 exchanges, CEXs and DEXs.
Since inception, DWF Labs has worked with more than 260 projects and provided customised ecosystem support, a few selected partnerships:

*Synthetix: https://thenewscrypto.com/synthetix-treasury-council-establishes-strategic-partnership-with-dwf-labs-raising-20-million-in-funding/
*Algorand: https://www.bloomberg.com/press-releases/2023-06-26/dwf-labs-and-algorand-foundation-reach-strategic-partnership

Alongside with investment and MM, DWF Labs also provides support on defi liquidity, token design, PR/Marketing, exchange listing, code and security audit. We aim to be a true ecosystem partner.

What can DWF Labs contribute to Yearn?
*Use up to 3m CRV ($1.34m) to buy yCRV (depending on the ratio of yCRV-CRV in the liquidity pool on Yearn)
*Deploy mixed assets of yCRV and CRV (depending on the ratio of yCRV-CRV in the pool) to the yCRV-CRV pool to help rebalance the pool and stake this on Yearn for a minimum of 12 months.
*Loaned YFI tokens will only be used for YFI market making purpose for both spot and derivatives market, with DWF Labs market share of 7.5% and 30bps bid ask spread.

What DWF Labs needs from Yearn?
Loan amount & Tenor:
DWF Labs is requesting approval for a 12-month loan of 350 YFI ($1.95M) at a 1% annualised interest rate from the DAO’s treasury.

Loan Repayment:
DWF Labs agrees to return the full 350 YFI loan amount at the end of the 12-month period and 1% annualised interest paid to the DAO’s treasury every 4 weeks with stable coins.

Loan settlement:
If approved by the Yearn DAO, 350 YFI will be sent from the DAO’s treasury to DWF Labs address:

What are next steps?
Following community discussion and feedback after 7 days, we will look to initiate a Snapshot Vote with voting options:

  1. For - Approve and transfer a loan of 350 YFI to DWF Labs
  2. Against - Reject the proposal.

Thank you for the proposal. I would suggest two modifications, for this to be something to make sense to Yearn (from my perspective).

  1. A multisig consisting of Yearn core members and DWF labs controls the 3m CRV for the duration of the agreement (with the CRV thus more effectively serving as collateral for the YFI loan).

  2. The 3m CRV is used to mint new yCRV, rather than swap/ deploy to the liquidity pool. This will require a bit more management at the outset and completion of the arrangement but it would provide lasting benefit for Yearn to balance out the two sources of yield for DWF (I know that I’m discounting the 1% offer on the YFI loan, but that’s pretty small) and the risk of sending out the treasury risk.

Thank you for considering!

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