PR with Payload
Summary:
Enable a Balancer gauge for the wUSK/paUSD/USDC (e-cs-kp-usd) composable stable pool with a 2% cap on Ethereum.
wUSK is an erc-4626 wrapper of USK, USK is a KUMA interest-bearing token (KIBTs) backed by KUMA NFTs, themselves backed by US 12 months T-Bills, issued by the KUMA Protocol.
paUSD is crypto-backed USD stablecoin issued by the Parallel Protocol.
USDC is a stablecoin issued by Circle, a cryptocurrency backed by U.S. dollars or dollar-denominated assets like U.S. Treasury securities. USDC’s reserve assets are held in segregated accounts with regulated U.S. financial institutions.
References/Useful links:
Parallel Protocol (prev. Mimo Protocol):
Link to:
- Websites (paUSD): https://pausd.mimo.capital/
- Documentation: https://docs.mimo.capital/parallel-protocol/
- Code: GitHub - mimo-capital/mimo-defi
- Social: https://twitter.com/mimo_labs & https://twitter.com/ParallelMoney
- Audits: Quantstamp - Public Security Assessments
KUMA Protocol:
Link to:
- Websites: https://kuma.bond/
- Documentation: https://docs.kuma.bond/kuma-protocol/
- Code: GitHub - code-423n4/2023-02-kuma
- Social: https://twitter.com/mimo_labs & https://twitter.com/KumaProtocol
- Audits: Security & Audits - Kuma Protocol
Protocol Description:
KUMA
The KUMA Protocol results from the work of two distinct organizations: Mimo Capital AG and the KUMA Protocol.
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Mimo Capital AG, a Liechtenstein regulated and licensed company, audited by Grant Thornton issues tokens backed by bonds (KUMA NFTs) using NFT technology (underlying bonds are held by Bank Frick & Co. AG) to authorized individuals/companies (KYC/KYB).
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The KUMA Protocol is a decentralized entity governed by vMIMO token holders that leverages these NFTs and issues KUMA interest-bearing tokens (KIBTs), which are freely transferable erc-20 tokens. These interest-bearing tokens behave similarly to stablecoins whose balance increases automatically.
Currently, 3 KIBTs are deployed on Ethereum, Polygon PoS, Mantle & Linea:
- FRK, a KUMA Interest-bearing token backed by KUMA NFT, themselves backed by 357 days French T-Bills. (± 3,35% APR)
- USK, a KUMA Interest-bearing token backed by KUMA NFTs, themselves backed by US 12 months T-Bills. (± 4,5% APR)
- EGK, a KUMA Interest-bearing token backed by KUMA NFT, themselves backed by 740 days Next.e.GO Mobile SE Corporate Bonds. (± 8,75% APR)
Parallel Protocol
The Parallel Protocol (prev. Mimo Protocol) is a Collateralized Debt Position (CDP) protocol deployed on Ethereum, Polygon PoS and Fantom. Stablecoins (PAR & paUSD) are decentralized (controlled by vMIMO holders), non-custodial, overcollateralized, and fully redeemable synthetic asset pegged to the Euro/USD fiat currency.
Motivation:
The role of the e-cs-kp-usd pool is to increase the stability of paUSD and wUSK (1), the on-chain liquidity of both paUSD and wUSK (2), connect the Parallel and KUMA ecosystems (3) and providing a fiat gateway to paUSD & wUSK holders on Ethereum (4). Together, these 4 points allow for building a Bonds DeFi ecosystem.
- paUSD & wUSK peg:
- paUSD is issued following the CDP model; if paUSD trades below its peg, CDP owner are incentivised to buy paUSD cheaper and repay their debt; if paUSD trades above its peg, CDP owner are incentivised to borrow paUSD and sell them at a higher price; since wUSK can be exchanged for Bonds NFT, and can be sold for real USD, arbitrages can be performed between the Balancer pool and USD market to help maintain the paUSD peg; so if paUSD trades below or above its peg, anyone can perform an arbitrage without having to go through a CDP.
- wUSK is an erc-4626 wrapper of USK. USK is issued by using the “swap” function on the KUMA Protocol, each USK are backed by Treasury Bonds NFT, if the peg is below the real price, KYC/KYB people are incentivized to buy USK and redeem the NFT, if the price is above the peg, NFT holders are incentivized to mint USK and sell them.
- On-chain liquidity:
Since paUSD can be exchanged for USDC and wUSK which are redeemable for USD. Users can swap paUSD for wUSK and/or USDC then USD by buying/selling KUMA NFTs and/or redeem USDC for USD to access the latter’s liquidity or vice versa. - Connect ecosystems:
The wUSK/paUSD/USDC pool connects Parallel and its paUSD (essentially a way to borrow USD with various collateral) to KUMA and its wUSK (providing onchain US T-bills), enabling multiple use cases.
- DeFi on-ramp and off-ramp: USK has a direct fiat on and off-ramp by buying/selling underlying KUMA NFTs.
- It would also connect paUSD holders to the KUMA Bonds NFTs ecosystems.
A few notes:
- PAR (the Parallel EURO stablecoin) already have a gauge on Balancer Polygon: 2eur (PAR)
- Mimo Labs has started building positions in AURA (±175k $vlAURA) & BAL and the Parallel Protocol treasury currently holds 21k $vlAURA.
- Mimo Labs is buying ±$25k AURA per month which are locked to incentivize the liquidity.
- The Parallel DAO will also pay ±$1.5k voting incentives per week using the Paladin Quest vote marketplace to the pool (more details here)
Specifications:
- Governance:
- Parallel Protocol: none on-chain governance (vote via snapshot) and decisions are executed through a ⅝ multi-sig (4 team members and 4 dao members elected by vMIMO holders).
- Polygon PoS: 0x2046c0416A558C40cb112E5ebB0Ca764c3C5c32a
- Ethereum: 0x25Fc7ffa8f9da3582a36633d04804F0004706F9b
- Fantom: 0x174162ddecE9d0b7B68fd945e38c3372C4C818ba
- KUMA Protocol: none on-chain governance (vote via snapshot) and decisions are executed through a 4/7 multi-sig (currently held by 7 team members, but a proposal to elect DAO members will take place later).
- Ethereum: 0xB5502747AABDCa21E832951b4caaF739dA33f450
- Polygon PoS: 0x1A1A402746FBe8bcFE0f7992AE27c4eD81A70156
- Linea: 0x1151d63eB6154843D4b4898cF4C63aF556642997
- Mantle: 0x37D1C94087643dFE5288F72cD1e4A6fde5b130A9
- Oracles: Parallel uses Chainlink and in-house build price feeds for all its collateral assets
- Audits:
- Parallel: Quantstamp - Public Security Assessments
- KUMA: Security & Audits - Kuma Protocol
- Mimo Capital AG Proof of Reserve: https://app.kuma.bond/reserve
- paUSD has a debt limit on each collateral and the ownership of the Parallel protocol and is held by a 5/8 multisig with 4 signers from Mimo Labs and 4 signers elected by vMIMO holders, renewed every 6 months. (more details here)
- wUSK is an erc-4626 wrapper of USK. USK is a freely transferable Interest Bearing token backed by US T-bills offering approximately 4,5% APR. The KUMA Protocol accepts to swap regulated NFTs (KUMA NFTs) backed by bonds in exchange of composable interest-bearing tokens (KIBT) based on the metadata of the NFT.
- wUSK Rate provider: Summary judgement: SAFE (https://github.com/threerocks-defi/code-review/blob/main/rate-providers/wUSDKRateProvider.md)
- Market history:
- paUSD has been live since September 2023 (on Ethereum); paUSD is soft pegged to USD.
- wUSK has been live since September 2023 (on Ethereum); wUSK is an erc-4626 wrapper of USK. wUSK accrue value according the T-bills yield.
- Value:
- The wUSK/paUSD/USDC (e-cs-kp-usd) pool will act as the main route for arbitrages and the use cases mentioned above (on-chain liquidity, etc.).
Contracts
- wUSK/paUSD/USDC (e-cs-kp-usd) Balancer Pool (Ethereum): (AMP 200; trading fees 0.05%): Balancer
- USDC (Ethereum): Circle: USDC Token | Address 0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48 | Etherscan
- wUSK (Ethereum): Wrapped USK (wUSK) Token Tracker | Etherscan
- paUSD token (Ethereum): paUSD Stablecoin (paUSD) Token Tracker | Etherscan
- Gauge: Balancer e-cs-kp-usd Gauge Deposit (e-cs-kp-usd-gauge) Token Tracker | Etherscan
Specification:
The Balancer Maxi LM Multisig eth:0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv4 at 0x5DbAd78818D4c8958EfF2d5b95b28385A22113Cd and call the addGauge function with the following arguments:
gauge(address):0x3c8502E60eBD1e036E1d3906Fc34e9616218B6e5
gaugeType(string): Ethereum