Proposal to add Concentrator Vaults as collateral for minting MIM

[RFC] Requests For Comment
1

[RFC] - Your Title Here: Add Concentrator Harvester Vaults as collateral to mint MIM

Summary/Scope:
Abracadabra has already whitelisted Curve LP & Yearn Finance vaults as collateral. Concentrator, project incubated by Aladdin DAO, and built on top of Convex Finance, offer harvester vaults on several different LP where all harvested rewards are then concentrated into blue chip assets.
The Aladdin community has praised more leverage on top of Concentrator products, and thus we would like to request to whitelist Harvester Vaults from Concentrator.

Reference:
Website: https://concentrator.aladdin.club/vaults/#/vault
Audit: https://github.com/AladdinDAO/aladdin-v3-contracts/blob/main/audit-reports/SECBIT_Concentrator_Report_v1.1.pdf

Introduction:

Concentrator, project incubated by Aladdin DAO, is a yield optimizer built around the idea of positive sum farm-and-hold yield farming. Audited by Peckshield & Secbit, Concentrator has been operational since March 2022 (https://defillama.com/protocol/concentrator)

Built on top of Convex Finance, harvesters vaults received the same rewards as Convex LPers. Those rewards are then compounded into the preferred blue chips asset selected by the LPer on Concentrator from what is called Compounder vault.

Compounder vaults: Total TVL: 16m$ as of 24-Jul
The top Compounder vault with TVL > 2m$ are:
asdCRV - Auto-compounded sdCRV staked on Stake DAO.
aCRV - Auto-compounded cvxCRV staked on Convex
afrxETH - Auto-compounded frxETH/ETH LP
abcCVX - Auto-compounded multi strategy around CVX yield farming
aFXS - Auto-compounded cvxFXS staked on Convex, should see an increase of TVL since Governance proposal was approved to go from cvxFXS/FXS LP to staking cvxFXS, increasing the underlying yield.

Harvester vaults:Total TVL: 47m$ as of 24-July
61x total different vaults with selective compounder vaults
The top harvester vaults with TVL >2m$ are:
Trycrypto USDT
WBTC/sBTC
ETH/sETH
CRV/cvxCRV
clevUSD/FRAXBP
USDC/crvUSD
USDT/crvUSD
stETH/ETH

Concentrator offers, as explained above, many other vaults and would like to select with the MIM community the one that fulfills the risk parameters as well as the interest from the MIM community.

Motivation:

Abracadabra has already whitelisted Curve LP (cvx3pool 1.77% APR) & auto-compounded Convex LP from Yearn Finance (yv-3Crypto USDT with 8.47% APY on Yearn).

Concentrator offers many other vaults not available at Yearn, and will offer users to leverage their Yield earned on Concentrator. Leverage Yield Farming has seen a tremendous demand during the last Bull Market & is likely to come back to the same level when risk-on opportunities will rise.

This is why Aladdin DAO would like to whitelist a selection of harvester vaults for the MIM, Curve & Concentrator community.

Contracts/Technical Requirements:
We would love to discuss the technical requirements to be set-up for the different harvester vaults with the Abracadabra community.

Cauldron parameters:

  • Initial Interest:
  • Borrow Fee:
  • LTV:
  • Liquidation Fee:
  • Initial top up of xm $MIMs

Risk Assessment:
Here are the TVL on Convex of the following LPs:

  • Trycrypto USDT: 38m$, pool perfectly balanced
  • WBTC/sBTC: 18m$, pool perfectly balanced
  • ETH/sETH: 15m$, pool perfectly balanced
  • CRV/cvxCRV: 57m$, balance 30%/70%
  • clevUSD/FRAXBP: 3.4m$, 67%/33%
  • USDC/crvUSD
  • USDT/crvUSD
  • stETH/ETH

The above shows the possibility to easily access deep liquidity of the underlying assets in case of liquidations triggered by the safety parameters. While some assets do not have a Chainlink price feed such as cvxCRV, crvUSD or clevUSD, price feed of LP can be taken directly from Curve, and price feed aTOKEN underlying assets can be taken from Curve times Concentratror Index (aCRV price = cvxCRV x Conentrator Index). If requested, we would be happy to support in writing a specific oracle feed contract.

Outcome:
This proposal is to gather opinions & questions from the Abracadabra community to assess what would be the best harvester vaults to be whitelisted on Abracadabra.

We will be happy to answer any question you may have.

Subli - Core Contributor @ Aladdin DAO

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Howdy! My name is Kmets and I am also a core contributor at AladdinDAO. In addition to the information that Subli provided above, I would like to inform the Abracadabra community of a new governance proposal that recently passed for Concentrator: The Concentrator Revenue Sharing Proposal (Snapshot)

TL;DR - What this means it that Concentrator’s revenue distribution is now split into three parts:

  1. veCTR holders: 33.3%
  2. Concentrator treasury: 33.3%
  3. Collaborative DAOs: 33.3%

In conjunction with the proposed modified revenue redistribution, an additional 3-tiered incentive structure to revenue sharing for DAOs was also proposed. The following incentive structure would be applied to collaborative DAOs should they choose to place TVL into Concentrator harvesters:

Concentrator TVL Contribution Table

TVL contributed by collaborative DAOs % of Collaborative DAO revenue sharing
<5,000,000 15%
Between $5,000,000 and $20,000,000 25%
More than $20,000,000 50%

At the end of each month, Concentrator will pay any DAO that participates based on their contributing TVL to the protocol. Any apportioned revenue remaining from the 33.3% reserve for collaborative DAOs will be donated to veCTR holders and Concentrator treasury on a 50:50 basis.

For Abracadabra, this means that if the above proposed Concentrator harvester vaults are whitelisted, and if the TVL on Concentrator contributed by Abracadabra were to rise above $5,000,000, then Abracadabra would be eligible to directly receive a portion of the revenue generated from those vaults. This is essentially free money to encourage DAOs with substantial TVL to integrate their products with Concentrator…and we want Abracadabra to be one of those DAOs!

A higher TVL for Concentrator means that the vaults are harvested more often leading to a better experience for users. And for participating DAOs, it means that their products get to benefit from the unique. battle-tested vault structures that Concentrator provides which could be utilized for collateralized lending opportunities and/or treasury management.

We want to make the Abracadabra community aware of this opportunity to help them make a more informed decision on the RFC. We, the AladdinDAO core team and community, are here to help make this a positive sum proposal that benefits both communities and their aims in defi. Happy to answer any questions or provide more details as needed. Thanks for your consideration!

-Kmets

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