Updated Proposal made on 16th December can be found here
A 50/50 profit share should be done between Popsicle Finance and Abracadabra. Leveraged LPing makes the most sense to be done via the Popsicle Finance UI, not via Abracadabra, in order to create the best user experience and attract the ideal target market.
Abracadabra at the current state is largely being used by single assets to make them liquid, or to leverage them up. In terms of LPs that are actually being used, only the Curve LPs are being utilized, these LPs however are like kind assets. Meaning that volatility is not high.
If we then look at the utilization rate of the Trader Joe LPs it’s clear that it is low - only 6% utilization. This is not due to a product market fit issue, but rather due to Abracadabra.money not being the venue where users enter into LP positions.
If a user is thinking about LPing, the first thing that pops into their head is not Abracadabra.
In comes Popsicle Finance…
Popsicle Finance is solely focused on LPing. Popsicle recently relaunched Sorbetto Fragola, the Uniswap V3 LP optimizer that sets and dynamically changes the ranges that funds are being LPd in to optimize for the most yield. In the near future, Sorbetto Limone product will be launched. Limone is the multichain LPing strategy, where the protocol optimizes LP capital across DEXs on multiple blockchains in order to earn the highest yield. The current Sorbetto Fragola TVL sits at $32million.
Considering that Popsicle Finance is all about LPing, it would make sense to on all chains deploy the opportunity for users to LP on whatever DEX they choose for whichever pair they choose, and there after allow them to add leverage on top.
Abracadabra provides the opportunity to leverage under the hood, Popsicle Finance provides the opportunity to provide liquidity and leverage that liquidity all from one page.
User decides to LP on DEX
Finds out he can leverage them on Abracadabra
Deposits LP on Abracadabra
User chooses a pool to LP
User deposits X and Y or Zaps into the LP
User chooses leverage
User has open leveraged LP position
Initiate a 50/50 profit share between Abracadabra and Popsicle Finance, for all leveraged LPs on Popsicle.
Fees from Abra: Interest + liquidation fee + borrow fee
Formula: (Fees for interest + Liquidation fee + borrow fees)/2
Abracadabra has the ability to generate leverage through MIM.
Popsicle Finance has the front end for LPing, as well as the target user base.
A snapshot proposal will be created up for voting, and this post will be edited to include that and allow all the wizards to vote about it!
A new proposal has been posted following this one on the 16th December, you can find it in here: AIP #1 - MIM Replenishes for PLP Cauldrons - #89 by Squirrel