Summary:
This proposal is to add a veBAL gauge for the new DOLA/bb-a-usd 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 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-3POOL through our partnership with Yearn (currently $56M TVL), or the DOLA-FRAX basepool through our partnership with Frax.
- Via purcha stablecose with DAIin 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/bb-f-usd 50/50 stable pool. Inverse recently successfully obtained a veBAL gauge for the INV/DOLA 50-50 pool on Balancer and this proposal aims to build on this momentum. Platform BAL incentives would help deepen DOLA liquidity as we seek to further alleviate our dependence on the Curve ecosystem for DOLA liquidity. The DOLA-3CRV gauge on Curve currently has over $56MTVL ($108M ATH) and Inverse recently obtained gauge approval for a DOLA-FraxBP; we have provided around $1mm USD value in bribe incentives to drive liquidity into these pool. If approved, we expect to do the same for our veBAL gauge and are in coordination with Hidden Hand to facilitate the incentivization and drive the Balancer bribe market narrative.
The Inverse Finance Team aims to be a major adopter of Balancer technology and bribe incentivizer for BAL emissions utilizing Redacted Cartel’s Hidden Hand (“HH”) platform to help accelerate and deepen our liquidity pool. Once the 50/50 DOLA/bb-f-usd stable pool is whitelisted for BAL rewards, our bribe incentives program would 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 the DOLA-3CRV and DOLA-FraxBP Curve pools 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:
A custom INV oracle with both a price ceiling and borrow cap feature has been in use following a price manipulation incident on April 2nd. This oracle has been reviewed by Peckshield and is actively managed by Inverse’s Risk team.
Inverse Finance’s new lending market is due to release later this year after audits and will use ChainLink price oracles. 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:
Inverse DAO has recently established a working relationship with Peckshield, and boutique security firm Defimoon. A first round audit of a recent product was produced (here), and an audit of relevant legacy code is in progress. The DAO also now has dedicated members overseeing risk, what we call the Risk Working Group. A recent 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 5 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.
DOLA stablecoin is fully decentralized, with no possibility to pause or blacklist any addresses, even if INV governance wanted to do so.
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. We now expect to have further resilience through the deepening of our DOLA-FraxBP and our INV-DOLA bal LP. Please see our graph below of DOLA’s peg YTD.
