AIP #1 - MIM Replenishes for PLP Cauldrons

In short, this is proposing that Popsicle Finance become a distribution channel for Abracadabra leveraging, and assumes that the direction of value is one way only.

With a distribution partnership a revenue share might be appropriate. But I feel these sort of partnerships should follow an approach that allows them to prove value first, then determine the optimal revenue share, and whether that revenue share should be one way or reciprocal.

Therefore I’d be in favor of Popsicle Finance opening the front end for Abracadabra leveraging, but suggest we start with no revenue share in the first instance. We can operate under a roadmap where the community will review the take up of liquidity over time (first check in after 1 month, then 3 & 6 months) and assign an appropriate (and importantly a reciprocal) revenue share once it’s clear how value is accruing and to which protocol.

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That makes sense to me. We could start with each protocol charging their traditional fees.

I think I see where you’re going with this (an assumption on my part), and if I’m understanding this correctly it seems like a perfect fit. That said, I would imagine a bit more clarification for those of us that are relatively newer to both DeFi, and this community might be helpful, specifically from a UI/UX perspective.

I’ll use myself as an example user persona since it seems likely that a large part of our growth will be fresh users becoming involved in DeFi via the “newer” chains like Fantom and Avalanche, since they vastly reduce several key barriers that previously caused interaction with any DeFi tools to be inaccessible (i.e slow tx speeds and prohibitive Eth gas fees)

I have been actively trading in DeFi since October 1st, and came into the space via my own interest and research in Avalanche, and the C-Chain was my primary point of interaction with all of DeFi until a few weeks ago. Recently (2-3 weeks) I have branched out into Fantom, and some of the newer chains. Like many, I minimize interactions with Eth Mainnet as much as possible due to the costs involved with transactions.

Could you perhaps address in more detail how this proposal might affect some of the following issues that are currently “less that ideal” from a user perspective?

  1. The proposed changes seem to offer more options and flexibility on how I might be able to provide liquidity and use leverage by utilizing the Popsicle Finance platform.

While I have researched Popsicle and have a good understanding of what it’s meant to do, my ability to interact with it from my preferred “home” chains (Avax C-Chain or Fantom) are very limited currently. This is also the case with Abracadabra, and in both cases all the most desirable features are only available via Eth Mainnet (i.e. CRV leveraging, DegenBox, Staking nIce V3 optimizer etc…).

Basically the current state of Abracadabra functions more like 3 (or more) completely different products with completely different options available depending on what chain you connect from, with the most valuable options being available only on the Eth Mainnet (which many of us find prohibitive due to costs)

Q 1) Would the proposed use of Popsicle LP tokens “standardize” access to some (or all) of these options, making them available to users regardless of which blockchain we use to access the Popsicle user interface?

  1. In my experience, the current methods of obtaining MIMs when they become available pretty much requires the user to physically wait with a “pre-loaded” transaction 1 click away from execution in order to obtain a portion of the replenished supply (at least on the Avax chain).

I completely understand the importance of limiting the MIM supply, and get that the “first come first served” system currently in use seems to be the fairest option available. That said, from a user experience standpoint, the current system also seems to discourage interaction with many features that, while technically available, currently exist in distinctly separate “feature silos”.

It’s my understanding that Popsicle Finance was specifically built to solve very similar (and equally frustrating) cross-chain problems with token transactions via the use of MIM pools existing on each chain and interacting with each other.

Q 2a) Would the proposed LP system help to solve some of the day to day issues that users are currently facing in regards to obtaining replenished MIMs?

Summary:
Personally I feel less inclined to chime in on the financial side of this proposal, since I am a bit late to the stakeholder party and haven’t experienced the same issues as some of the more senior community members. That said, I spent nearly 25 years developing and executing Web2 projects. I can see a pretty clear path in your outline suggesting that you have most likely addressed these day to day UI/UX issues. I am submitting this doc in the hopes that outlining these improvements in a bit more detail might be helpful in your campaign to pass this proposal.

Keep up the good work,
Fraug’Dib

Was an outright merger of both ever considered/discussed? If so what were the pros/cons raised? As an investor in all three of your projects I think the proposal does add long term value overall. Pin your ears back and go for it.

anyting to support ICE

Updated AIP #1:

TLDR: Based on the feedback and discussions in here, I have gone back and discussed what the optimal method of these sorts of cross features really is. In the medium post here, we as Abracadabra have discussed the aspect of opening up the development of cauldrons. I now retract the above proposal and here with change this proposal.
On the Popsicle Finance side, we have worked and developed cauldrons for our PLPs. This proposal is thus simply changing to a question of whether we as the Abracadabra community would like to top up the Popsicle PLP cauldrons with MIM. The fees for the cauldrons as normal go to Abracadabra.

Short Overview

As mentioned in the proposal above, Popsicle Finance has launched Sorbetto Fragola which optimizes UniV3. Popsicle has now developed cauldrons for the following Popsicle optimized LP positions:

USDT/WETH
USDC/WETH
WBTC/WETH
USDT/UST
USDC/UST
USDC/USDT

Popsicle makes a return on these pools via a performance fee which comes from the optimization of the actual pools. As the cauldrons are now developed, Popsicle Finance is now proposing to allow for top ups of these cauldrons- to start off with Popsicle proposes a top up of 25m MIM for each pool.

Benefit to Abracadabra

The benefits of this proposal are simple. Abracadabra is making fees off of the cauldrons without them having paid for the development costs as well as not having to deal with any UX/UI. Whatever TVL Popsicle Finance has from these cauldrons Abracadabra will be earning fees. Furthermore MIMs backing will have further diversity.

Fee Structure

All cauldron fees are going to sSpell holders as per usual. The structure for all cauldrons are:

Maximum collateral ratio 85%
Liquidation fee 8%
Borrow fee 0.5%
Interest 3%

Conclusion

The initial proposal to make a easy fee split for all LP pools is here with deprecated, instead the proposal is turning into a simple top up proposal, where the question is whether these cauldrons that Popsicle Finance has developed with the help and guidance of Abracadabra, should be topped up with MIM.

Considering this is a relatively drastic change to the existing proposal, Popsicle looks forward to hearing feedback, and then moving this towards a vote.

Next Steps: The proposal is now up for voting! Vote here.

18 Likes

Excellent first application of the “anyone can make a cauldron” process IMO.

Can’t wait to see it put up for voting good job ser !

7 Likes

Amazing proposal!

As we’ve seen in the past wee’ve has other communities asking for cauldrons, I myself have received quite a lot of DM’s from other communities wanting a cauldron.

This will also make communities buy sSpell to allocate new MIM mints much like CVX dictates where CRV rewards be allocate.

Communities can design these caldrons and through votin we can monitor their performance, riskier assets will always carry a high interest fee, but those are minor details.

TBH I would like to see VC backed chains (e.g. Solana, Polygon, Harmony) deploy cauldrons, purchase SSpell and vote MIM so they can have liquidity.

8 Likes

Seems like a great way we’re both sides are pleased. I’ll be using both so very happy if this goes through. Love to see frogs unite.

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Great proposal and good test case before opening up to other teams.

I support this proposal.

this a NO for me, I don’t support this proposal. :sparkles:

agreed with proposal assuming this all goes toward a true AMM direction in a big volume/meaningful way such as through sushiswap takeover - we need to see that happen otherwise we are disenfranchising Spell hodlers if they dont have any ICE either (i have both)

Interesting. I’d like to know why

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Is your comment in reference to the 2nd proposal or the 1st one? A 2nd proposal has been created. I’m curious which one specifically you’re referring to?

I am not exactly clear on whether or not an automated process is managing the collateral deposits on these cauldrons. Basically if they the majority of a position could be liquidated/unwound rapidly.

Are there are any technical challenges or financial pitfalls to backstopping the MIM given the interaction with Popsicle Finance?

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Awesome and happy to see community is more united on this one. Happy to see proposals going through active changes based on community sentiments which is the most important thing here. Im very happy with this and will be voting yes. Will really help us expand collateral types to improve health of MIM.

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I agree, risks should be discussed prior to this being put to a vote.

The article mentions the possibility of including malicious code into contracts and the need for a security review and code quality checks.

Can’t we create a standard to which any cauldron contract has to conform? At the highest level every cauldron operates in the same way right?

Consisting of:

  1. An asset to collateralize
  2. Fee’s (presumably a governance function)

So it makes sense that a standard could be created to maximize the uniformity of cauldron contracts thereby reducing risk of disappearing MIMs, is there a technical reason this is not feasible?

It seems it would ensure risk assessments and quality assurances are maintained in a sufficiently thorough but efficient manner. Standardizing technical specifications also has the added benefit of making it easier to onboard cauldrons and expand MIM’s reach more rapidly with the approval of sSPELL holders.

This will likely require rigorous documentation and it may be costly in terms of effort in the short term but we need a strong foundation for this type of innovation to succeed in the long term. Doing it once and getting it right is preferable to rushing out a half baked system and finding gaps later on.

This is a really great step in the right direction for everyone.

2 Likes

This is a great way to bring synergies to the frog nation eco system