Combined 2023 Week 14 Payload PR
Summary
This is a proposal to add a gauge for SILO/ETH 80:20 Pool that will serve as the base layer for Silo Finance’s veSILO governance module.
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Silo Finance has a large amount of POL in Balancer, earning incentives that are recycled through voting incentives for AURA and BAL holders to further bolster the pool liquidity. Silo Finance continues to increase its voting incentives over time as protocol revenue increases and is committed to support the Balancer ecosystem long-term.
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Silo Finance is a longtime partner of the Balancer DAO.
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Silo Finance core contributors have allocated roughly $1.4M~ of personal liquidity to the SILO/ETH 80:20 pool to help expand the governance base of SiloDAO.
References/Useful Links:
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Silo Website: https://www.silo.finance/
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Dev Docs: Protocol Overview - Developer Docs
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Silopedia: https://silopedia.silo.finance/
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Twitter: https://twitter.com/SiloFinance
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Forum: https://gov.silo.finance/
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Snapshot: Snapshot
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80/20 SILO ETH Pool: Balancer
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50/50 SILO ETH Pool: Balancer
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Silo Token Address: $0.06 | Silo Governance Token (Silo) Token Tracker | Etherscan
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Defillama: Silo Finance: TVL and Stats - DefiLlama
Protocol Description
How does Silo Finance work?
Silo Finance is a lending market that allows users to lend and borrow any asset in a risk-isolated way through the use of bridge assets. Essentially, the protocol creates an individual lending market (or ‘silo’) for each token asset and connects all markets via bridge assets that serve as a protocol-wide accepted collateral. This design creates a security benefit where an exploit taking place in one market doesn’t spread to other markets like it is the case in traditional DeFi lending markets.
Silo Finance Facts
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Protocol is not upgradable (contracts are battle-tested since Aug. 2022)
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Non-custodial: Neither DAO or core team can ever take custody of user funds
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No multi-sigs: DAO controls limited admin functions
State of $SILO liquidity
Our two largest liquidity pools are Balancer 80:20 SILO-ETH and 50:50 SILO-ETH pools with total TVL ~ $2.2M. We conduct regular buybacks of $SILO using SiloDAO’s revenue directly from our balancer pools, increasing Balancer’s fee revenue. Additionally, we use part of revenues to increase our voting incentives to BAL and AURA holders
Motivation
An 80:20 pool confers lower IL exposure to LPs, allowing users to maintain greater upside exposure to the base asset. The upcoming veSILO tokenomics upgrade is designed around a locked version of 80:20 SILO-ETH BPT, similar to veBAL. Having a whitelisted gauge will provide greater incentives for $SILO holders to lock tokens which will allow additional locked TVL to flow to Balancer.
Specifications
Governance: Silo Finance is operated as a DAO and governance decisions are completely decentralized. SiloDAO is a Cayman Foundation operating under the name of Silo Labs. Token holders create proposals, on-chain and on Snapshot, to manage funds and affect changes to markets such as replacing oracles, updating interest model settings, etc.
Oracles: Silo’s lending markets currently use Uniswap v3, Balancer v2 and Chainlink oracles in order to read asset prices. This is required to gauge lending parameters such as LTV and Health Factors to allow liquidation of undercollateralized positions. We also have some custom Chainlink oracle implementations for assets with things like a rebasing index such as gOHM and wstETH. Users however are only exposed to the oracles that their particular market uses.
Audits & Formal Verification: Our audit reports from ABDK and Quantstamp as well as a Certora Formal Verification Report can be found here Audits & Formal Verification - Silopedia
Centralization vectors: No, token holders are the only ones with any sort of control over the protocol but even then they are limited to only being able to update certain things like oracles, bridge assets, interest rates, LTV/LT settings, and protocol fees. Any changes made are also locked behind a TimeLock Controller, allowing users ample time to withdraw should they not agree with the aforementioned changes.
Market History: $SILO price had been seeing a lot of fluctuations given its limited DEX liquidity. We have been seeing positive price action and volume as of late as liquidity increased. Historically, the one sharp drop in token price happened as a result of the largest token holder then - large fund- going underwater in the aftermath of Terra collapse.
Value: Balancer has long been SILO’s liquidity hub and our 80:20 SILO:ETH Balancer pool will continue to be our primary source of liquidity for $SILO on Ethereum.
Specification:
Gauge Address: [0x6661136537dfDCA26EEA05c8500502d7D5796E5E] (Vyper_contract | Address 0x6661136537dfDCA26EEA05c8500502d7D5796E5E | Etherscan)
For Pool with address: 0x9CC64EE4CB672Bc04C54B00a37E1Ed75b2Cc19Dd
Capped at 2%
Should be added by the DAO Multisig on mainnet. It can be added using the following call data for the addGauge function on the gauge controller(0xC128468b7Ce63eA702C1f104D55A2566b13D3ABD).
This can be done via the authorizerAdapter after granting the proper roles as defined in the payload. The calldata for performAction is calculated as follows using eth-brownie:
controller=Contract("0xC128468b7Ce63eA702C1f104D55A2566b13D3ABD")
controller.add_gauge.encode_input("0x6661136537dfDCA26EEA05c8500502d7D5796E5E", 2)
The resulting call data is 0x3a04f9000000000000000000000000006661136537dfdca26eea05c8500502d7d5796e5e0000000000000000000000000000000000000000000000000000000000000002
