Defrost - Melt the Avalanche // Proposal to add H2O:3CRV to the Gauge Controllet

Gauge Proposal Template:

Summary:

Proposal to add CRV Gauge incentives to the H2O-CRV Factory Pool in Avalanche (0xF72beaCc6fD334E14a7DDAC25c3ce1Eb8a827E10).

H2O is a crypto-backed overcollateralized stablecoin in the Avalanche blockchain. I like the project and the meme.

It is whoever makes it their interest to promote deeper liquidity for the H2O-CRV pool, for fun and for profits - build, add value, create value.

References/Useful links:

Link to:

• Website

https://www.defrost.finance/home
• Documentation
https://docs.defrost.finance/
• Github Page
DefrostFinance · GitHub
• Communities

Twitter: https://twitter.com/Defrost_Finance
Discord: Defrost Finance
Telegram: Telegram: Contact @Defrost_Finance

• Other useful links?

Medium: Defrost – Medium
Token Address: Defrost Finance Token (MELT) Token Tracker | SnowTrace
Audit: Defrost Finance - CertiK Security Leaderboard
Contract Addresses: Contract Addresses - Defrost Finance

Protocol Description:

The project fair launched in the avalanche blockchain around November 2021. Token supply is 100M tokens. At 0.38 USD fully diluted valuation is 38M (takes a few years to get there). Circulating mkt cap is 1.1M, with an additional 1.4M in staking which can be taken into circulation any time. Emission schedule can be found here: MELT Emission Schedule - Defrost Finance.

Defrost issues an avalanche native stable coin soft pegged to the USD called H2O.This is done by posting collateral on the platform. Currently there are about 52M H20 minted. Most of it is in the H2O-CRV pool as people have been using it for leverage yield farming (possible to achieve 100%+ apy in stable coins lp pairs through leveraged yield farming). Pool address is here 0x40a2bf8a6091010cae4a96e02e13d5b7157be236

Defrost Finance (www.defrost.finance) is a decentralized protocol that allows one to utilize liquidity pool (LP) tokens and other pool tokens from various Avalanche and cross-chain protocols as collateral for generating H2O, a soft-pegged stablecoin native to the Avalanche ecosystem.

Defrost Finance helps users improve capital efficiency from assets locked in pools or vaults.

The pool sits at 57M (0xF72beaCc6fD334E14a7DDAC25c3ce1Eb8a827E10), currently it is deeply overweighted towards H2O as users have been using the stablecoin as a leverage instrument for looping since they can’t be liquidated by spikes in H2O prices, and they can choose when to repay the loan to take advantage of cheaper H2O for instant profits.

The project is incubated by Avatar - Avalanche Asia Star Fund (https://www.avaxavatar.com/) and Wanlabs (a Wanchain startup accelerator https://www.wanchain.org/). Institutional liquidity providers to the h20-crv pool are Avatar, Wanlabs, and Colony (https://www.colonylab.io/). Smart contracts have a certik audit Defrost Finance - CertiK Security Leaderboard. The team is collaborating with https://immunefi.com/ to keep funds safu.

Defrost’s governance token is Melt, which can be staked in exchange for sMelt. sMelt can be used for boosting yields, it accrues 50% of the platform’s revenues and is used for DAO governance.

Motivation:

I want melt to melt up and stay there.

Curve is a key partner of Defrost. An incentivized inclusion on Curve emissions provides visibility to H20. Incentive rewards from the Curve community can be seen as a vote of confidence and approval for Defrost.Finance. Some of DeFi’s brightest minds operate within the Curve ecosystem and a gauge equates to their tacit approval that we offer value to the ecosystem.

It also bolsters arbitrageurs confidence to deploy 3CRV stablecoins (USDC/USDT/DAI) to purchase H2O at a discount and collectively push H2O back to peg. This will in turn make it possible for Defrost to offer more of its looping services (upwards of 100% apy on stable token pairs after a few loops with no risk of liquidation from h20 price spikes as the contracts only take into reference h2o amount not h2o value + chainlink feed for collateral value for repayment of debt and liquidation).

  1. Governance:
  1. Oracles: Does the protocol rely on external oracles? If so, provide details about the oracles and their implementation in the protocol.
  1. Audits: Provide links to audit reports and any relevant details about security practices.
  1. Centralization vectors: Is there any component of the protocol that has centralization vectors? E.g. if only 1 dev manages the project, that is a centralized vector. If price oracles need to be updated by a bot, that is a centralized vector. If liquidations are done by the protocol, that is also a centralization vector.
  1. Market History: Has the asset observed severe volatility? In the case of stablecoins, has it depegged? In the case of an unpegged asset, have there been extreme price change events in the past? Provide specific information about the Curve pool: how long has it been active, TVL, historical volume?

H20 hasn’t experienced much volatiltiy, however, the peg is slightly off as users have been using it as a leveraging instrument.
Defrost’s governance token Melt is another beast though; it has had extreme volatility.

1 Like

Individual questions relevant for the dao aren’t answered. This proposal is incomplete.

3 Likes

Thanks for taking the time to read and comment! I’ll work more on it over this week and edit/improve it. Any suggestions? Can you clarify which questions you would like to see better answered?

A win for both if we go through