[BIP-536] Enable DOLA/mkUSD Gauge [Ethereum]

PR with Payload

Summary:

Proposal to add DOLA/mkUSD to the Balancer Gauge Controller.
Stableswap pool deployed here.
Uncapped gauge deployed here.

References/Useful Links:

About Inverse Finance

About PRISMA

Protocol Description:

About Inverse Finance

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 (currently $11.6M TVL), DOLA/USDC on Velodrome ($3.2M TVL), DOLA/USDC on Balancer ($3.8m TVL on ETH, $4.3m TVL on Arbitrum) and DOLA/USDbC on Aerodrome ($17m TVL)

DOLA is not “algorithmic” and the INV governance token is not used to mint or redeem DOLA.

About PRISMA

Prisma is a new DeFi primitive focused on unlocking the full potential of Ethereum liquid staking tokens (LSTs). Prisma allows users to mint a stablecoin (mkUSD) fully collateralized by liquid staking tokens. The stablecoin is incentivized on Curve and Convex Finance to create a capital-efficient flywheel where users can receive trading fees, CRV, CVX, and PRISMA on top of their Ethereum staking rewards. Prisma’s codebase is completely immutable, based on Liquity, in order to create a robust protocol and truly decentralized stablecoin with favorable and flexible collateral parameters to make it attractive for those wanting to get more from their LSTs without tail risks from other stablecoins. The Prisma DAO is in charge of parameters, emissions, and protocol fees. Prisma has previously received a seed investment from Curve Finance, Convex, Frax, LlamaNodes and many others.

Motivation:

This proposal aims to add a veBAL gauge for the recently deployed DOLA/mkUSD LP on Balancer. This pool marks the debut of a mkUSD stable LP on Balancer, and is created as a joint effort of PRISMA and Inverse Finance to onboard our users to the Balancer ecosystem. Inverse Finance has a long and fruitful history with Balancer, and can currently count on gauges for INV/DOLA and DOLA/USDC on Balancer Mainnet, Arbitrum and Optimism (via Beets). Inverse Finance is eager to build deep DOLA liquidity on Balancer on mainnet.

The Inverse Finance Team plans to continue being a major adopter of Balancer technology and onboard PRISMA to the ecosystem. Together, both protocols intend to make full use of the bribe incentivizer for BAL emissions to help accelerate and deepen our liquidity pool. Once the DOLA/mkUSD stable pool is whitelisted for BAL rewards, our bribe incentives program would begin to promote trading, bribing, LP farming activity on Balancer. Eventually, PRISMA intend to incorporate this pool into their Gauge controller, meaning PRISMA rewards flow directly to it.

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.

  1. Governance: Provide current information on the protocol’s governance structure. Provide links to any admin and/or multisig addresses, and describe the powers afforded to these addresses. If there are plans to change the governance system in the future, please explain.

About Inverse Finance

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.

About PRISMA

Prisma is an immutable and fully on-chain protocol. Despite this, some minimal admin functions are retained and operated via governance. Some examples of possible admin actions include: modifying fees, adding or removing a collateral, pausing or unpausing protocol functionality, transfer protocol fees, adjusting the quorum on admin votes.

  1. Oracles: Does the protocol rely on external oracles? If so, provide details about the oracles and their implementation in the protocol.

About Inverse Finance

Inverse Finance’s new fixed-rate money market, FiRM, uses Chainlink price feeds for all markets on FiRM, with some implementations also utilizing Curve EMA price feeds.

About PRISMA

Prisma uses Chainlink oracles as well as a custom Frax oracle (also used by crvUSD).

  1. Audits: Provide links to audit reports and any relevant details about security practices.

About Inverse Finance

Inverse Finance has undergone multiple audits and bug contests, which can be found linked 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.

About PRISMA

Prisma has completed three audits from Nomoi, MixBytes and Zellic. Audits can be viewed here. More information regarding security at Inverse Finance can be found on the risk docs here.

  1. Centralization Vectors: Is there any component of the protocol that has centralization vectors? E.g. if only 1 dev manages the project, that is a centralized vector. If price oracles need to be updated by a bot, that is a centralized vector. If liquidations are done by the protocol, that is also a centralization vector.

About Inverse Finance

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 5 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): 4 of 8 Multisig that can change staking reward rate to INV stakers.
  • Fed Chair: 2 of 7 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.

About PRISMA

Prisma is fully decentralized with minimal admin controls outlined here. All members on the Emergency Multisig can be found here. A DAO guardian (operated via a multi-sig) has the power to cancel any pending proposals.

  1. Market History: Has the asset observed severe volatility? In the case of stablecoins, has it depegged? In the case of an unpegged asset, have there been extreme price change events in the past? Provide specific information about the Balancer pool: how long has it been active, TVL, historical volume

About Inverse Finance

The DOLA stablecoin is soft pegged to $1, and like fully decentralized, over-collateralized stablecoins, can experience some volatility around this peg however it rarely will fall below $0.99.

Currently, the deepest liquidity pool for DOLA stablecoin is DOLA/USDbC on Aerodrome (BASE), with a TVL of $17m at the time of writing.

About PRISMA

The mkUSD stablecoin is soft pegged to $1, and like fully decentralized, over-collateralized stablecoins, can experience some volatility around this peg.

Currently, the deepest liquidity pool for mkUSD stablecoin is mkUSD/USDC on Curve, with a TVL of $29m at the time of writing.

Specification

method to add via governance: 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): 0x6D560CbE3Cc25Eca8c930835Ec3d296a6C16B210

gaugeType(string): Ethereum

https://snapshot.org/#/balancer.eth/proposal/0x1d85df8d01fafeca4b14f860d941a900e9600f35608404a211cce3040656cde1