[Proposal] SuperBoosted

[xgambitox]

Authors: xgambitox, Storm0x, 0x7d54

Summary

Bootstrap SuperBoosted - a Yearn SubDAO, self-governed by SuperYFI holders, to build on top of Yearn’s core products.

Status

Discussion

This proposal is currently in the discussion phase. As per our voting rules outlined in YIP-55[#1], it will be in discussion for at least 3 days with a non-binding forum poll to gauge sentiment before it can be assigned a YIP number and move to Snapshot for a binding vote by veYFI holders.

Abstract

If adopted, this proposal seeks to:

• Bootstrap SuperBoosted as a Yearn SubDAO; permissionless and self-governed by SuperYFI holders.
• Ratify the Design Specification of SuperYFI and endorse its development and deployment.
• Specify the implementation and bootstrapping process.
• Specify parameters and initial configurations.
• Specify functionality during normal operations.

Background

As long-time contributors of Yearn, this proposal is an effort to continue to add value to the protocol with new projects that boost (no pun intended) Yearn’s product offerings in a synergistic fashion.

The SuperYFI project has been in active development for several months, aiming to establish a SubDAO designed to deliver immediate advantages to both the Yearn protocol and its community.

Motivation

In accordance with YIP-61[#2] and YIP-71[#3], Yearn continues to operate within a multi-DAO structure. To further the evolution of Yearn’s decentralization, it is crucial to foster community-driven efforts that expand upon Yearn’s core developments.

The inaugural product from SuperBoosted is SuperYFI, which is designed to function on top of veYFI and V3 vaults as its foundation, while using services provided by yTeams, such as Dinobots, to contribute fees back to Yearn’s Treasury.

SuperYFI aims to provide an alternative for YFI maximalists, allowing them to maintain decentralized governance voting power while remaining closely aligned with Yearn’s community and the best interests of the DAO. All of this is achieved while simplifying and maximizing the efficiency of interacting with veYFI individually.

SuperYFI in a nutshell

• SuperYFI: a fully transferable token that is minted on a 1:1 ratio by providing YFI, which is later perpetually locked onto Yearn’s vote-escrowed system, veYFI.
• Staked SuperYFI: Yearn v3 vault to deposit SuperYFI, that receives and compounds dYFI and YFI rewards from perpetually locked YFI on veYFI.
• SuperYFI Liquidity Provider: Yearn v3 vault to deposit a Yearn SuperYFI/YFI LP curve factory vault, that receives and compounds curve rewards from LP, and dYFI from a veYFI gauge.
• SuperBoosted Vaults: Yearn v3 vaults for each gauge available in veYFI, that receive and compound dYFI rewards to the underlying asset, boosted by SuperYFI.

Design Principles

SuperYFI is designed to be:

• Self-governing. SuperYFI holders control SuperBoosted SubDAO entirely.
• Flexible. Through an established process, governance can set and configure SuperYFI settings in the best interest of the system.
• Immutable. Smart Contracts are not upgradable. Design avoids proxy upgrades and changes to the system require redeploying.
• Extensibile: The core design is centered around veYFI but is adaptable to other systems.

Out of Scope

• Gauge voting. This will be executed off-chain until veYFI implements on-chain voting.
• Yield. This is determined by the protocol’s configuration.
• Governance voting process. SuperBoosted Governance will adhere to Yearn’s current voting process, until a change is approved by SuperBoosted’s governance.

Future Possibilities

• Open access to Yearn products through alternative gateways.
• Option for SuperYFI as collateral in other smart contract systems.
• Deploy yearn V3 strategies on top of SuperYFI system.
• Deploy new smart contracts to extend to new systems/protocols.
• Integrate SuperYFI and associated vault assets into external, permissionless DeFi strategies that are vetted through Yearn’s robust security process. This initiative aims to expand the array of choices available to depositors while simultaneously attracting increased capital.
• Develop a bribe market around SuperYFI.

Risks

• Any Yearn protocol integration like veYFI or v3 vaults being vulnerable to an exploit.
• A critical flaw in SuperYFI’s design or implementation results in unintended behavior or loss of funds.
• Incorrect protocol parameters lead to subpar performance and functionality.
• Proportion of SuperYFI to YFI in the pool can become unbalanced due to different conditions and low liquidity.

SuperBoosted <=> Yearn Synergy

• All development, deployment and infrastructure costs needed will be assumed by the contributors that want to participate and will be maintained separetely.
• Protocol fees will operate normally as with any protocol that builds on top of vaults V3.
• SuperBoosted will work under the same conditions a regular partner of Yearn’s Partnership Program[#4], by providing new sources of TVL.
• Treasury from SuperBoosted will be used to continue to bootstrap its development as established by its governance.
• SuperBoosted will operate in a dedicated space inside Yearn’s current governance forum section and discord.
• Integrations with yTeam services will provide fees back to Yearn’s treasury.
• yCRV voting power will be beneficial for launching the Curve Pools to support the system.
• An initial one-time grant from Yearn’s treasury is requested in order to cover external audit expenses giving priority to yAudit according to schedule.
• Following an external security audit, at yBudget discretion it’s requested that Yearn treasury adds liquidity in the SuperYFI LP. A recommended allocation for this is 20-30 YFI, divided equally between YFI and superYFI at a 50%/50% ratio.
• Furthermore, an allocation of 33 YFI (0.1% of the total supply), to be deployed directly from the treasury as pure SuperYFI. This allocation serves as an additional revenue stream and voting power for depositors.

Alternatives Considered

• Creating a Yearn-themed product: Option rejected to ensure independency and autonomy and also avoid reliance of third party governance.
• Launch without Yearn’s support: Option rejected. The project aims to cultivate synergy and deliver benefits to the Yearn community, in accordance with Yearn’s goals and principles, while also ensuring the inclusion of existing contributors from the community.

Specification

1. Design Spec

1. System Specification

2. Role Assignment

1. Governance: Initially set as a Gnosis Safe multisig, with a 3/5 signing threshold, consisting of SuperBoosted contributors and trusted Yearn community members, delegated by SuperYFI holders to execute transactions until an on-chain voting system is implemented.
2. Management: Initially set as Governance, until it’s delegated to a specialized team. Can set roles, fees, and other configurable parameters of deployed strategies.
3. Guardian: Initially set as Governance, until it’s delegated to a specialized team. Can shut down deposits and certain system functionalities in case of emergencies.

3. Operational Requirements

3.1 Voting

1. SuperYFI, stakers, and LP holders will have voting power equivalent to the amount of underlying SuperYFI
2. The voting duration will adhere to the rules stipulated by the veYFI voting system.
3. Voting with Snapshot to later transition to on-chain.
4. No quorum requirements will be set at launch.
5. Fractional voting is permitted.
6. Votes are final and irreversible.
7. General proposals require a 2/3 qualified majority vote (66.66% for).
8. General proposals execute in submission order; later proposals override earlier ones.

3.2 Initial Parameters

Parameter	Description	Configurable Range	Default
Mint Buffer	Pool depeg threshold to route between minting or market buying SuperYFI (In BPS)	0 - 500	15
Performance Fee	Fee charged from reported gains that get sent to SuperBoosted Treasury, deducting Yearn Protocol Fees. (In BPS)	500-5000	500
Min Acknowledgement Fee	Minimum fee that SuperBoosted vaults distribute to Staked SuperYFI holders when the price of the pool is pegged. (In BPS)	0 - 10000	1000
Max Acknowledgement Fee	Maximum fee that SuperBoosted vaults distribute to Staked SuperYFI holders when the price of the pool is depegged. (In BPS)	0 - 10000	2000
Lower Pool Peg	Lower value to consider pool as depegged for Acknowledgement Fee purposes. (In BPS)	0 - 10000	9000
Upper Pool Peg	Upper value to consider pool as depegged for Acknowledgement Fee purposes. (In BPS)	0 - 10000	10000
Max Lock Amount	Maximum amount of held YFI allowed for locking into voting escrow. (In BPS)	0 - 10000	10000
Max Mint Cap	Maximum amount of SuperYFI allowed to be minted. Part of guarded launch	-	150
Max Deposit Amount	Maximum amount of assets to be deposited per strategy. Part of guarded launch	-	Defined per strategy
Amplification parameter A	It determines the sensitivity to pool imbalances.	1-5000	50
Swap fee	Fee charged for swapping assets with the pool, paid to SuperYFI Liquidity Provider holders	0.04-1%	0.08%
Asset type	Asset type for pool, as an integer	0=USD, 1=ETH, 2=BTC, 3=Other	3
Implementation idx	Curve pool index of the implementation to use. All possible implementations for a pool of N_COINS can be publicly accessed via plain_implementations(N_COINS)	–	4

3.3 Minting Access

Minting of SuperYFI is only allowed by depositing YFI into the SuperYFI contract on a 1:1 ratio.

4. Development Status

Development of smart contracts is mostly in code freeze stage and just pending final review changes. The protocol is estimated to be ready for launch in a few weeks following approval of this proposal, and after the official launch of vaults v3 contracts on Ethereum Mainnet.

Tasks that need to be executed include:

1. Finalize the security review and bug fixes for smart contracts.
2. Deploy contracts on the testing environment for development integrations for the frontend and backend.
3. Deploy frontend and backend with MVP use cases.
4. Coordinate with Yearn marketing team for launch.

5. Launch

1. (Guarded Launch) Deploy final version of smart contract with TVL limits in place and also emergency pause capability by governance for the protocol.
2. Finish external audit.
3. Fine-tune limits for adjusting risk.
4. A SuperYFI/YFI Curve Pool is deployed.
5. A SuperYFI/YFI Curve yVault is deployed from the Yearn Vault Factory.
6. A SuperYFI/YFI Curve Pool Gauge is requested.
7. A SuperYFI/YFI veYFI Gauge is requested.
8. Conduct additional audits and establish bounty programs to further enhance security based on TVL growth.
9. Propose SuperYFI vote to lift SuperYFI max mint cap.

6. Implementation

1. After this proposal’s approval, we will continue with last tasks of the development phase and enter launch phase.

7. Use at Your Own Risk

While our team diligently follows best practices and adheres to industry standards to enhance smart contract security prior to launch, it is important to acknowledge that smart contract risks are inherent and, despite our efforts, we cannot assure a completely issue-free protocol upon launch. We want to make it clear that Yearn and YFI token holders will not be held liable for any critical failures or financial losses experienced by users while utilizing this protocol.

Vote

Non-binding signaling poll

Proceed with this proposal in its current form?

• Yes
• No

Community

If you’re keen on staying updated with announcements or eager to lend a hand, please connect with us on Twitter. We’re open to engagement and support from the community! link here

References

[1] YIP-55: Formalize the YIP Process
[2] YIP-61: Governance 2.0
[3] YIP-71: Activate veYFI
[4] Yearn Partnership Program

[wavey]

Really exciting to hear about this design and thoughtfulness.

When it comes to making SuperBoosted a subdao of Yearn, my personal belief is that the DAO should not favor one wrapper over another. These systems work best if all are on the same neutral playing field. This way, the market will select the design that is best for the user and encourage decentralization over the long term.

[Tube]

Hey, Hubert from Stake DAO.
Although it’s nice to see people building on top of veYFI, I think it doesn’t make sense to have this product officially supported by Yearn, and financed by Yearn.
1/ When we built the veYFI liquid locker, the position of the DAO was to be neutral and not favor anyone in the wrapper game. Of course a governance vote can change that, but I don’t think it makes sense. Instead of fair and healthy competition, creating an incumbent will just lead other wrappers to stop their activity or stop building (not only Stake DAO, others are working on it already). That means no more external innovation/marketing, but also no more additional incentives. It would also kill the liquidity of non-incumbent projects which means that users using them will be stuck forever.
2/ Why would yearn pay for this when they could have it for free? You guys should build your superbooster, but you don’t need to have financing from Yearn to do it. I prefer to see the revenues of yearn going to dYFI yield than to pay for the support of particular wrapper with limited experience in the space of governance token liquid staking.
3/ Would probably need to see the contracts before accepting to associate yearn’s reputation to this new product, so I guess the correct way to do it is first, publish the code, then ask for a grant to audit it?

[xgambitox]

Hey thanks for sharing your thoughts around it!

The proposal is not meant to be Yearn favoring this project over others. It should be net positive for Yearn to have as many projects building on top of veYFI, and all yearn products, and what a better way to achieve it than helping in bootstrapping and encourage this to happen. This just happen to be a community driven effort, for our own community, where voting power remains in the hands of YFI holders, by locking through SuperYFI, to vote in the best interest for the DAO. One more option for the community.

All the points brought are great feedback. We are open to listen more feedback from the community and amending the proposal as needed in alignment to what is best for Yearn’s success.

[devops199fan]

I agree with @wavey and @Tube that it is not the place of the DAO to play kingmaker with wrappers, whether that is by funding audits, providing liquidity for bootstrapping, or other means that unfairly advantage a single player. Competition will produce the best results for the protocol and users.

I think a better option would be to formalize a grant application process/benefits for wrapper protocols. This would ensure there is no favoritism, and applications could either be voted on by token holders or vetted by a current or new yTeam.

@xgambitox we are actually building something similar for Cove and are at around the same stage of development. Would be awesome if we could collaborate or join forces!

[xgambitox]

Im in for a solution that encourages many protocols to build on top of yearn, and particularly veYFI. Truth is, until now there is only one player in the game. Yearn will thrive more when many more get involved.