We need to provide liquidity to our New LSP synths on Polygon when they are ready (expected early November 2021). In order to do this we must set funds from the treasury, which lives on Ethereum mainnet to polygon, and then manage those funds there
In continuation of the asset allocation from YIP-83, I propose that we send 130 ETH and $1.1M in stablecoins to provide liquidity for our new synths on Polygon.
While we work on a longer term, and more decentralized solution, I propose that we send all funds that we plan to use for Polygon liquidity to our existing Polygon multi-sig (Contract Address 0x5553b79f4ee172e76537fd6a43629c44f6034f18 | PolygonScan) and use it to perform all actions necessary to provide liquidity for Yam Synths.
At the same time, in order to improve the security of this wallet, we should upgrade it from a 2-3 multi-sig to a 3-5 multi-sig.
The current signers for the multi-sig are @ethe, @flygoing.eth, and @HodlDwon.
I propose we expand that list to include myself and one other (TBD). We are currently in discussions with the team about who should be on the multi-sig, and we may update some of the original signers.
I will update this post when we know who the final signers will, but thought that getting it posted now for people to review made sense, even without knowing who the final list. All signers will be known before moving to a snapshot vote.
We are launching new Synths on polygon as part of a rollout of our new DeFi-Tools product line. We need to continue bootstrapping these pools to grow the Yam Synths product. At the same time, utilizing these funds in our synths earns UMA rewards for the treasury. Yam Synths products are currently earning ~49% APR on ETH, and we can expect similar (most likely higher) returns on the funds we invest. I will have another post soon that goes over liquidity mining on polygon with the new LSP contracts. But the gist is it is easier and more capital efficient than the current model and should pay out higher APRs that currently, up to ~$20M in TVL.
There is easy way to extend the governance functionality that we currently use on Ethereum L1 onto polygon. There are some new solutions available that may work for the task, but they are not going to be possible to implement in the timeframe needed to perform the liquidity allocation mentioned above. We currently have a multi-sig on polygon that we can use. Because the amount of money that it will control is higher than what was previously assumed for the comethSwap program (what it was approved for), I am recommending we add 2 additional signers to increase security.
All signers are on, or have in the past been on the core team and are known around the community.
Proposed Treasury Funds to be moved to Polygon:
130 ETH to be deployed to the 2xDPI synth
$1.1 M USD to be deployed, split between to the Sushiswap APR Synth and 50x IL synth.
Total is ~$1.6M dollars based on prices from 10/22/2021
In the chart below, the green cells show the funds that would be sent to polygon. The actual breakdown of which stablecoins are sent, and the fact that they are not shown equally distributed is done to make the chart work nicely and may not represent final distributions. Total amounts will not change though.
Next steps after approval would be to add this proposal to the on-chain vote at the end beginning of November. That proposal would move the approved funds to either the L1 multi-sig first to then send to polygon, or send the funds directly to the polygon multi-sig.
In order to update the multi-sig, the existing signers would need to modify the existing multi-sig to add the 2 new signers.