stakedllc / yips Goto Github PK

I know this has been thrown around internally, and the issue is passive vs speculative. The other issue is on- vs off-chain solutions. Just wanted to jot this down here so we can continue these ongoing conversations.

Could a RAY:

1. Take % equity based on a calculation or choice of calculations (% weighted by performance, by nominal/staked/inflation/real %) and then create buckets of PoS coins to put equity into?
2. Every day/week/catastrophic event according to the code, rebalance that portfolio
3. This would yield far more potential gains
4. And speculative gains
5. However, potentially lose out as the underlying asset might fall in price.
6. Could the RAY basket adjust every-so-often or in realtime the % of the basked based on TA or other kinds of red flags?

I think a big ol checkmark and gambling terms would help us launch speculative products - getting funds off-Eth and into PoS might be trickier...

Why
Half of DeFi's business on compound, fulcrum, and etc. is through borrowing instead of just lending. Most of these will continue to give out % growth on collateralized funds. Allowing borrowing would complicate matters, but draw in people and money that doesn't exist on RAY right now.

Solution
On a 'manage RAY' there might be an option to borrow against that RAY, which may involve rebalancing to get the optimum rates.

Considerations
Now, RAYs might liquidate or otherwise lose value over time. This may be contrary to the point of RAYs. Conversationally, Borrow Vs Lend RAYs could be two separate objects, and Borrows could have the same valueadd by paying down the balance on one DeFi and re-borrowing on another when rates become preferable. RAY could take a % on top of the interest, vs the compound (or other) baseline.

Additional Info
This availability should be there for most DeFis.

What might make the most sense is to have RAY index the borrowers, giving you the best rate, and have exist as it is now except there's a new 'borrow' button on the interface.

Check here for existing conversation: Stakedllc/robo-advisor-yield#7

This is the discussion thread for YIP-2.

Abstract

Add a new Opportunity for the ETH portfolios - the Uniswap ETH/WETH liquidity pool.

RAY strives to earn the best passive yield possible on assets supported. Adding this Opportunity will help do that for the ETH asset.

Considerations

The current delay is a decision between waiting for Uniswap V2, or integrating with Uniswap V1 now.

UPDATE: We've decided to wait to integrate with Uniswap V2, which should be coming out mid-March. We don't need to wait as long to integrate with them because they're an exchange -> a less complex system, and don't have mechanisms such as liquidations, etc. that need to be tested through market volatility.

I had this idea awhile ago, even joined the 0x Discord but got no response from their market making program: https://blog.0xproject.com/introducing-the-0x-market-maker-program-42edc902b1f0

I ran into a wall anyways: how much gas would it cost to be aware of best bid/ask?

Then, a day or two Gnonosis approached me to sell a service... lo and behold it supports on-chain price discovery!

Now, Hummingbot mass mailed me a 'liquidity miner' or market maker.

They seem to be doing market making onchain, and getting certain bonuses and rebates at least from 0x Protocol out of that list.

It's more speculative and maybe for a very certain kind of RAY user, but it sounds to me like we could add on-chain market making opportunities for RAY stables + WBTC + ETH.

Why
Diversification of assets people are loaning against. If I hold DAI, SAI, USD and ETH, I'll surely want to hold WBTC so that 2/5 of my coins might moon.

Solution
I think nuo.network and fulcrum.trade might have on-chain solutions for WBTC.

Considerations
There must have been some issue preventing nuo.network from v1. I believe it's not having on-chain with verified code to build with. @dpurhar27 or someone else advised me all parties were working towards optimal solution.

Additional Info
This issue is actually (I think) on-chain, meaning that we could actually implement it in the current climate.

Part of the adoption problem for blockchain as a whole is in finding useful and productive uses for the protocols.

Next is marketing.

When you have a working product that outperforms banks and keeps your $USD-backed money liquid (meaning you can withdraw it + interest at any time, or at different points in time) it opens the doors to all sorts of new SaaS, landing pages, marketing campaigns and a social legion of ambassadors ready to champion these new causes to their massive social following for some rewards.

1. If you slap a new face on 5-10% APR you can collect funds from people in a trustless manner and give out yearly payouts for a fixed amount of $ as scholarships, bursaries, etc. both anonymously and internationally - and even in a more democratic way, benefiting more than 1-2 students but maybe dozens of financially destitute ones - and at a fraction of the costs that the school's administrators would have you pay.

2. If you throw a bit of savings every week/year/bonus cheque into a multisig wallet whose equity grows with RAY, and lock the date by which that wallet can be accessed, you can now have a trust account for your little would-be millionaires who aren't quite age of majority yet. I know that if I were to pay my niece dividends from my legal corp she'd be taxed at 49%. I'm averse to banks and lawyers though - but still vested in her future. And I trust blockchain not to break and leave us all in the streets... so I set up a crypto educations fund.

These ideas are NOT custodial and we wouldn't need a license to run them. We'd simply set up a smart contract that says 1. enter funds here every so often 2. at pre-set dates the funds are send off to the 'award' addresses, who can do with them what they please.

The smart contract would have functions to revoke future payments to an address, create a new address and allocate it a % of the regular or one-time payment, etc. (unless, as in the trust fund example, it'd make more sense to lock this behavior - but if it's multisig then if one party loses a signature we just create a new multisig).

The real trick isn't the tech that's there, it's figuring out a new & attractive design and then figuring a way to shift the paradigm in these two cases. As the generations move over there would be less and less speculation against doing things traditionally.

Whereas anyone studying here would hop at the chance: https://www.draperuniversity.com/

Hummingbot recently released 'liquidity mining,' https://hummingbot.io/liquidity-mining/ where miners get the gains from the bid/ask spread in traditional market making as well as the 0x market making program: https://0x.org/market-maker The other half of the project 'for tokensized projects' deals with the benefits for those projects who want more liquidity.

I propose an onchain marketmaking in some depth here in the old Git: Stakedllc/robo-advisor-yield#2

I believe we can effect sustainable gains by market making ether markets and taking advantage of their marking making programs.

'With 0$ Market Maker fees and $0 gas created by signing a request that then hit the orderbook as limits, and a small expiry window so that we don't have to pay a fee to cancel outstanding orders, MM becomes possible.'

Doing it on-chain becomes a bit more tricky to find a method to realistically find token prices, but one can hit a uniswap smart contract and find the buy/sell prices for tokens in ETH, which would give you what the bid/ask range is for those tokens.

Why
Adding nuo.network would allow for more potential yields should their rates for any assets be higher.

Solution
I think nuo.network and has non-verified source code that prevents us from integrating on-chain. This is a blocker.

https://github.com/NuoNetwork

We can set up a contract where the withdrawal of capital is prohibited against until a certain date. Regular contributions will increase the interest yielded, which can be given (all or in part) to a young one as allowance - then their capital unlocks on some mandatory date (like turning 18) or by using keys for an event (like finishing school).

Even without much money as weekly allowance, the lesson of it growing over time as more is saved is a great lesson for children to experience as it applies to them. If a family isn't crypto-averse, an 18 year old could be getting $800 $1500 $2600 in interest alone - which would be financial freedom.

Why
Uniswap, as I undertand it, is a liquidity pool I can put funds into so that market makers and other parties can execute trades at leverage or for 'free-ish.' These funds then produce yield as the market makers have paid fees which gets added to the pot, then available for the liquidity providers to later withdraw. I may be incorrect in my understanding or I may have forgotten something.

Solution
https://github.com/Uniswap

Considerations
I'm certainly hoping their contracts are open and allow these types of on-chain interactions from other smart contracts.

image

https://etherscan.io/address/0x09cabec1ead1c0ba254b09efb3ee13841712be14#writeContract

Uniswap DAI (and everybody else born from this factory - 1000s exchanges) do indeed have 'addLiquidity' 'removeLiquidity' onchain :)

Additional Info
This appears to be something that would allow for yield :) Could RAY diversify and balance tokens thru exchanging them for Ether on the Uniswap exchanges should RAY put a new % into a new basket of top-performing Uniswap exchanges? This would also add fees to the pool, but cost some gas. I'm unsure how RAY balances things in on-chain loans, is it possible to have that kind of behavior (rebalancing without new gas) on Uniswap? @dpurhar27

Refer to Stakedllc/robo-advisor-yield#6 for existing conversation.

With blockchain, we can create a factory contract that spits out children contracts.

In this proposition, we have a contract creator who's owner address can withdraw interest from the new contract - but only to a predefined 3rd party address.

In effect, this allows someone to start a multisig that then gains interest every year. Every year I deposit new amounts to the equity, instead of my regular contribution to whatever charity, and they earn the interest.

Now, my funds live on in perpetuity and will earn that charitable cause more funds than should they have been given the equity upfront.

They can optionally leave in a % of the accumulated interest, and that would achieve compounding growth.

Shell is a proposed automated market maker for stablecoins similar to Curve. This pre-draft is intended to mark Shell as an opportunity to discuss pending more information.

As information comes out, it should be inputted into this discussion.

The intra-protocol stablecoin borrow / supply opportunity exists when RAY can borrow a stablecoin from a lending protocol for less than it can supply another stablecoin to the same protocol.

For example, let's say RAY is supplying DAI on dY/dX for 10%. If RAY can borrow USDC for 5%, RAY can borrow and swap the USDC for DAI, and supply DAI again at 10% (minus interest rate slippage). RAY can perform this action recursively until borrow capacity is maxed out, and significantly boost its yield.

This opportunity is distinctly more risky than the cross-protocol borrow / supply opportunity because it introduces a number of price risks. RAY is effectively shorting one stablecoin in favor of another. For soft-pegged stablecoins such as DAI this could be a problem should DAI get dumped on the market (i.e. fall in price versus USDC) or if DAI were to rise and RAY was short DAI. Another consideration for this strategy is price slippage, the RAY funds will incur some form of price slippage moving from USDC to DAI or vice versa. Lastly, similarly to the cross-protocol borrow / supply opportunity, this strategy exhibits interest rate risk.

At times, this opportunity can offer a significant yield boost. However, it is much riskier than existing YIPs. This discussion board is meant to weigh these tradeoffs. This discussion should also consider discussion outcomes from Pre-Draft: Cross-Protocol Borrow / Supply Opportunity.

Curve is a new automated market maker - similar to Uniswap - but Curve uses yield-generating stablecoins as it's liquidity source. Currently, Curve uses cUSDC/cDAI to market make between stablecoins. Liquidity providers are able to earn a higher return than just lending on Compound.

This could be a very interesting opportunity for RAY. However, it is worth discussing what form an integration would take. So, I wanted to start a few items for discussion before a YIP was proposed.

Primary item for discussion: Do we want to integrate Curve as an opportunity, or potentially wait until RAY can be added as a liquidity source? i.e. rayTokens as a liquidity supply option versus cTokens? How would this look?

Additional Items: 1) Supplying cUSDC/cDAI to Curve is not risk-free, how do we hedge price risk?

Additional Notes: Curve has had high-returns as of late, (mid-teens), for liquidity suppliers. This is something we need to take into account. RAY's suppliers ultimately want the highest return possible.

The cross-protocol borrow / supply opportunity exists when RAY can borrow an asset from an opportunity (lending protocol) for less than it earns by supplying it to another opportunity. For example, say RAY is supplying DAI on bZx. If RAY can borrow USDC from bZx for 4% and supply it to DY / DX for 5% then the yield of RAY is boosted.

The primary risk in this strategy is a potential change in the borrow / supply rates that moves against RAY after the borrow has occurred. Rate risk is, I believe, one of the most important areas of discussion for this issue. Can the oracle move funds fast enough to properly minimize this risk? Is the risk worth the reward for this opportunity?

This issue is intended to serve as a discussion forum before the drafting of a YIP.