Summary:
This proposal is to add a veBAL gauge for the new DOLA/USDC stable pool on Ethereum.
Pool deployed here.
Gauge deployed here.
References/Useful links:
Website: https://www.inverse.finance/
Documentation:ABOUT INVERSE - Inverse Finance
Transparency: Inverse Finance - Transparency Overview
Github Page: InverseFinance
Communities: Discord
Defillama: DOLA: TVL and stats
Protocol Description:
Inverse Finance is a community of crypto enthusiasts organized as a DAO and started on December 26th 2020. Inverse DAO governs and develops a suite of permissionless and decentralized financial tools using blockchain smart contract technology. The code base is open source and maintained by the community.
Inverse DAO’s core product is DOLA, a debt-backed USD stablecoin. DOLA is added into and removed from circulation;
- On the supply side of money markets, such as DAO-owned protocol FiRM, by Inverse Finance’s “Fed” contracts and is then made available to be borrowed through over-collateralized loans.
- Via injection/contractions into pools such as the Curve DOLA/FraxBP through our Convex Fed, DOLA/USDC on Velodrome, and previously DOLA/bb-a-USD on Balancer.
- Via purchase with DAI stablecoin using The Stabilizer.
DOLA is not “algorithmic” and the INV governance token is not used to mint or redeem DOLA.
Motivation:
This proposal aims to add a veBAL gauge for the DOLA/USDC stable pool. Inverse has previously obtained a veBAL gauge for the INV/DOLA 50-50 pool and DOLA/bb-a-USD 50-50 on Balancer and this proposal aims to build on this momentum. Following the recent unwinding of the DOLA/bb-a-USD LP due to a vulnerability with the implementation of our pool with the bb-a-USD pool; we are once again looking to build deep DOLA liquidity on Balancer. Platform BAL incentives would also help deepen DOLA liquidity as we seek to further alleviate our dependence on the Curve ecosystem for DOLA liquidity. If approved, we expect to continue what was previously done for DOLA-bb-a-USD for our new veBAL gauge and are in coordination with various bribing platforms to facilitate the incentivization and drive the Balancer bribe market narrative.
The Inverse Finance Team plans to continue being a major adopter of Balancer technology and bribe incentivizer for BAL emissions to help accelerate and deepen our liquidity pool. Once the DOLA/USDC stable pool is whitelisted for BAL rewards, our bribe incentives program would once again begin to promote trading, bribing, LP farming activity on Balancer.
Specifications:
You can view analytics for DOLA on Defillama. To learn more about the protocol, please visit our official docs, governance and our transparency pages.
Governance:
Inverse Finance Fed contracts mint DOLA directly to the supply side of lending markets or to pools such as the DOLA/FraxBP Curve pool as demand increases, or they retract and burn DOLA from the supply when demand decreases. The Fed contracts are governed by the Inverse Finance DAO, which is controlled by INV holders through governance. A detailed description of our governance can be found here. Equally, check out our transparency portal here which gives a visual representation of Inverse Finance Governance.
Oracles:
Inverse Finance’s new fixed-rate money market, FiRM, uses Chainlink price oracle for its wETH market. Inverse Finance’s old lending market relied on both Chainlink and non ChainLink oracles, however, borrows have been disabled since June 2022 with no current plans to re-enable.
Audits:
As part of our renewed smart-contract review process, Inverse Finance hosted a bug bounty contest on the Code4rena platform to conduct a comprehensive audit of our fixed rate lending protocol, FiRM. Inverse has also recently expanded its bug bounty program by launching a vault on the Hats.finance platform. FiRM contracts were also reviewed by boutique auditing firm DefiMoon, who have been our official security partners during Q4. In addition to providing security consulting and auditing services for FiRM, DefiMoon has also played a role in our recent deployments of FraxBP Fed, Aura Fed, and Velo Fed. In the immediate aftermath of our price manipulation incident, Inverse had hired leading security firm PeckShield in Q3 to perform an audit of our renewed INV oracle, as well as our bad debt repayment product. Their report can be found here.
The DAO also now has dedicated members overseeing risk, what we call the Risk Working Group. An announcement of the team’s formation can be found here.
Centralization vectors:
Within the DAO working groups have been formed to deliver work in specific areas. Often, these working groups will have a Multisig wallet that the DAO governance awards certain roles and limited DOLA or INV allowances in order to carry out required work. All granted privileges and allowances can be reclaimed/disabled by INV token controlled governance. These are:
- Treasury Working Group (TWG): 3 of 4 Multisig with allowances giving access to Treasury funds to optimize treasury management.
- Risk Working Group (RWG): 1 of 3 Multisig with privileges to pause actions in our (now disabled) lending market.
- Policy Committee (PC): 5 of 9 Multisig that can change staking reward rate to INV stakers.
- Fed Chair: 2 of 6 Multisig that can call the expansion and contraction functions (to mint/burn DOLA) on the Fed Contracts.
Please see our Multisig Wallet section of the transparency portal here.
Market History:
Inverse Finance DAO launched DOLA In February of 2021. Through the “Feds”, Inverse maintains the flexibility to adjust borrowing rates across one or even all partner lending markets in order to optimize supply and demand for DOLA and to maintain its USD peg. DOLA’s Fed mechanics have proven to be highly resilient at defending the peg, even during times of extreme stress. The DOLA-3Pool experienced 3Pool bank runs twice (on the days of oracle exploits) on April 2nd and June 16th; both times DOLA depegged for very short periods of time. Please see our graph below of DOLA’s peg YTD.
Currently, the deepest liquidity pool for DOLA stablecoin is DOLA/FRAXBP on Curve, with a TVL of ~$28m at the time of writing. Prior to deprecating the DOLA/bb-a-USD LP on Balancer, TVL sat at >$9.5m.
