Proposal: Add USDD/3CRV pool to the Gauge controller

Dear Curve Community,

Summary:

Proposal to add USDD/3CRV pool to the Gauge controller to enable users to assign a gauge weight and mint CRV.
This proposal is aimed at adding USDD-3CRV to the gauge controller.
This way USDD, a decentralized stablecoin on the ETH, TRON, BNB chains, and many more to come, will play an important role on Curve and add value to its community.

USDD Background:

USDD (Decentralized USD) is a cryptocurrency issued by the TRON DAO Reserve with a stable price and diverse use cases. It will have a built-in incentive mechanism and a responsive monetary policy, which will allow USDD to self-stabilize against any price fluctuations and help consolidate the value of USDD as a true settlement currency. The decentralized USDD stablecoin will free holders from any arbitrary impositions of central authorities and eliminate all entry barriers and effectively safeguard private property rights.
USDD will propel stablecoins to enter a new era where mathematics and algorithms lay the foundation for financial accessibility and stability in a decentralized manner.

Motivation:

Curve is a leading AMM protocol for stablecoins and has an extensive and thriving ecosystem that covers multiple chains. Adding USDD to Curve will increase the demand for USDD and establish an additional use case for this decentralized stablecoin. We also believe the addition of USDD to Curve will bring in liquidity and a gauge will help provide incentives to the 3CRV pool, which the USDD community will also contribute to.**

References/Useful links:

Website: https://usdd.io/
Whitepaper: https://usdd.io/USDD-en.pdf

Communities:

Twitter: https://twitter.com/usddio
Telegram Chat: USDD
Discord: USDD

For:

Add USDD/3CRV gauge to the controller

Against:

Do not add USDD/3CRV gauge to the controller

Poll:

The Add a gauge for USDD/3CRV vote is live

1 Like

Would be great to get more specifications around the protocol so that veCRV holders can asses the risks involved in this proposal.

It seems you did not complete all items in the proposal see here some of the parts that are missing from this proposal:

Specifications:

Please answer in a short and clear manner.

  1. Governance: Provide current information on the protocol’s governance structure. Provide links to any admin and/or multisig addresses, and describe the powers afforded to these addresses. If there are plans to change the governance system in the future, please explain.

  2. Oracles: Does the protocol rely on external oracles? If so, provide details about the oracles and their implementation in the protocol.

  3. Audits: Provide links to audit reports and any relevant details about security practices.

  4. 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.

  5. 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?

As extra context would like to know how what bridges you are planning to use? And what long-term modeling is done on USDD what would happen if TRX went down %99 … when does the system break down and when is it optimal?

Looking forward to this data to fully understand USDD …

3 Likes

Hi @ON-DeFi

Thanks for your speedy feedback, we appreciate your taking the time to guide us on how we can explain our project better and understand how more information is needed. We’d like to point out that USDD was initially launched on May 5th 2022, and we are currently in the process of solidifying certain aspects. However, we will keep the community informed through our official channels and here in the Curve community forum. As a very new project, we are excited to work with the likes of Curve and look forward to bringing a decentralized, algorithmic stablecoin, with all its potential, to users. The community’s thoughts and comments are most definitely welcome as we aim for USDD to be a stablecoin of trust for DeFi!

Please find below our answers to your questions:

  1. Currently we use a 5/7 mutisig-wallet to control the issuance of USDD, which is controlled by 7 different institutions.
    USDDmultisig1: TLntW9Z59LYY5KEi9cmwk3PKjQga828ird
    USDDmultisig2: TPcnRbpuB89eKKkfH2E7iJooAqeEZPpdGb
    USDDmultisig3: THdUXD3mZqT5aMnPQMtBSJX9ANGjaeUwQK
    USDDmultisig4:TBEp1Gndqp88SUWnS4NQH5CAMhduHgpoNY
    USDDmultisig5:TXZafZLKKgcXWTAq4YpLp3oCD4T9smsgmV
    USDDmultisig6:TXCu9ivZfybabh7r3aSmDPfLH6YybLjuvX
    USDDmultisig7:TA1FNwAaekqAULEZvkhAKzxvKVSL9fuQfZ
    Each issuance binds with an equal value of TRX burn, which can be found here: https://tdr.org. All issuances have been audited. After the initial launch, the governance will be moved to the TRON Network system, which is governed by the decentralized 27 validators elected by TRX stakeholders. 27 validators are all different institutions including Binance, Huobi, Poloniex, ant group investment, JD investment, etc. Anyone can apply to be a validator and be elected in a decentralized way. Full list can be found here: TRONSCAN | TRON BlockChain Explorer | 波场区块链浏览器

  2. The 27 TRON validators will serve as the primary oracle for price feed,which can be found here: https://usdd.io/USDD-en.pdf We are actively working with Chainlink to provide USDD price feed in the future.

  3. We are currently contacting multiple security agencies for auditing code, assets, and other security aspects. We will provide the code auditing within 2 weeks. Current asset audits can be found here:https://tdr.org/

  4. There is no component of the protocol that has centralization vectors. USDD (Decentralized USD) is a decentralized stablecoin governed by 27 validators who are elected by TRX holders. 27 validators are all different institutions including Binance, Huobi, Poloniex, ant group investment, JD investment, etc. Anyone can apply to be a validator and be elected in a decentralized way. Additionally, anyone in the community is able to help 1 USDD pegged to 1 USD via the TRON protocol, which is also described in our whitepaper (https://usdd.io/USDD-en.pdf).

  5. USDD has never observed severe volatility and depegged. USDD has been very stable since launch. The USDD protocol is pegged to the USD, and to avoid severe volatility, we established a stable, decentralized, and tamper-proof USDD-USD system.In the USDD protocol, The validators absorb the volatility of the USDD price, bearing short term costs. When the USDD price falls below the target, USDD holders can choose to burn their USDD to mint TRX, which will bring USDD price back to the target level.

The liquidity on Curve USDD3CRV pool is $24M with 4.2 million volume within 2 days.

The bridge we are using is Bittorrent Chain bridge (BTTC): https://wallet.bt.io/bridge

USDD is issued on the TRON network and runs on the TRON protocol, and it is bridged to Ethereum and Binance smart chain through the BTTC cross-chain protocol. BitTorrent Chain is a heterogeneous cross-chain interoperability protocol, which leverages sidechains for the scaling of smart contracts. All registered assets from ETH/BSC/TRON can be transferred between the 3 chains. BitTorrent Chain bridge is a decentralized protocol governed using BTT token, and validators are decentralized and prestigious institutions including binance and huobi Lists can be found here: https://wallet.bt.io/staking

TRX price has been quite stable since launch. By worst case scenario TRX price has been down around 70% and all the network is very stable in price volatility. TRON DAO Reserve also have over 10 billion USD worth of bitcoin/ethereum/usdc/usdt to maintain the stable price of USDD. Furthermore, if TRX price goes down, more people will convert usdd to TRX and buy TRX with USDT for arbitrage to earn profit, which helps the stability of the price as well.

Again, we are excited to work with Curve and the Curve community, and look forward to bringing a decentralized, algorithmic, USD-pegged digital dollar to the Curve protocol.

Looking forward to your feedback!

Best,

USDD team

Great what firm will conduct this audit?
Would be good to get a better understanding of the risks involved in USDD before applying for a Gauge I think it is best to wait until at least the audit is done.

Also, since USDD just went live on 05-05-2022 it would make sense to first get more price history so we can analyze the price movements and potential long-term risks. I still do not fully understand how this could work long term would be good to get a better understanding of this.

This seems premature given lack of details, lack of price history, and lack of any audits. And does not seem that the responses adequately address any of the issues. With respect, quite a few read as misleading / intellectually dishonest (e.g. saying USDD has ‘been very stable since launch’ despite just going live, or saying there is no centralization vectors).

While perhaps no one entity exerts singular control, issuance mechanism & price being set by 27 validators voting on what price should be (which white paper admits presents collusion attack vector) is problematic and not best practice. Oligopoly is not much of an improvement vs. monopoly as it relates to decentralization.

Think the community would be wise to spend more time thinking through attack vectors given the alleged governance attack on another core DeFi protocol (compound) by Sun earlier this year, but that is just my trustless side being biased and shouldn’t sway things either way per se. Main issue is proposal on its own merits does not stand.

Overall, while I hope the protocol can address items in full and help further build the curve & DeFi ecosystem, the proposal as it stands should not pass.

1 Like

Hi @ON-DeFi
Thanks for the feedback.
We already contacted industry top-level auditing companies to run a comprehensive audit on USDD. The auditing report is expected to be complete in about a week. We will share that with the community when it’s ready.

Ok great it would make sense to only cast a gauge vote after audits are done. Also calling $USDD a decentralized stablecoin makes no sense at this stage … you even tell it in your proposal “There is no component of the protocol that has centralization vectors” this is completely misleading and makes no sense.

I will vote against this proposal I think it is made too quickly and is misleading.

Hi @ON-DeFi and everyone from Curve community,

Thanks for your feedback. We’d like to address the concerns mentioned, and hope everyone can understand that we are a new project with a strong foundation and in the process of solidifying all aspects even further.
As for audits, USDD audits cover our cross-chain bridge and the entire, full-scale TRON and Ethereum contract, which are currently in review by a top-level auditor company. This requires a certain amount of time, considering the complexity, but we will most definitely release the completed report publicly once it is complete!
As for the centralization vector, we’d like to emphasize USDD is in the process of decentralization. We are currently in our initial stage of launch, which can be seen in our published roadmap, but we believe our commitment to decentralization can be evidenced by our recent efforts in governance. The TRON DAO Reserve just very recently welcomed Alameda Research, Amber Group, and Poloniex Exchange as whitelisted institutions, with more to come. This is all steady and stable progress in line with what is outlined in our USDD roadmap.
We believe our recent efforts and progress are evidence of our commitment to providing a decentralized stablecoin, and updates on the elements we are working on will be announced. We hope everyone can understand that again, we are in the initial stage of our project and have been completely transparent with our process, progress, and goal.
Thanks